FROM THE OFFICE OF PUBLIC AFFAIRS
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July 20, 2004
JS-1798
Treasury and IRS Address Self Exchanges
The Treasury Department and the Internal Revenue Service today issued a revenue procedure that modifies Rev. Proc. 2000-37.
Rev. Proc. 2000-37 provides that a "parking" transaction, in which the taxpayer acquires replacement property though an agent before disposing of relinquished property through the agent, may qualify as a like-kind exchange if certain criteria are met. The revenue procedure issued today provides that property owned by the taxpayer before the transfer to the agent does not qualify as replacement property in a parking transaction.
"Some taxpayers are using parking transactions to reinvest the proceeds of the sale of one piece of real property in improvements to other real property that the taxpayer or a related person already owns," said Acting Assistant Secretary for Tax Policy Gregory F. Jenner. "The revenue procedure issued today addresses some of these transactions. We will continue to study these transactions and will issue further guidance if we determine that other transactions are not consistent with the policies underlying the like-kind exchange rules."
REPORTS