IRS Revenue Ruling 2003-56
1031 exchange with partnership straddling two income tax years
Internal Revenue Service (I.R.S.)
Revenue Ruling (Rev. Rul.)
Released: May 9, 2003
Correction Released: May 22, 2003
Published: June 9, 2003
Section 704 - Partner's Distributive Share, 26 CFR 1.704-2: Allocations attributable to nonrecourse liabilities
If a partnership enters into an exchange that qualifies as a deferred like kind exchange under section 1031 of the Internal Revenue Code in which property subject to a liability is transferred in one taxable year of the partnership and property subject to a liability is received in the following taxable year of the partnersh ip, and the relinquished liability and the replacement liability are nonrecourse liabilities, then under section 1.704- 2(d), is the partnership minimum gain on the last day of the first taxable year of the partnership computed by using the replacement property and the replacement nonrecourse liability?
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