Herbert Law Firm LLC

ATTORNEY AT LAW

Clients and prospective exchangers:  Here is the new IRS Form 8824 for tax year 2011 in a fill-in-the- blank PDF file: http://www.irs.gov/pub/irs-pdf/f8824.pdf .  This is the form that proves that "like-kind exchanges" are OK if the rules are followed precisely.  Prospective exchangers should also peruse this form prior to committing to structure a transaction as an exchange:  this is the information you must be prepared to disclose on your tax return and which will disclose dates of acquisition and disposition of the relevant properties.

And here is a link that will allow you to calculate the federal capital gains tax you will owe if you do not do a successful exchange.  To this you must add state taxes based on the tax rate of the state in which you live, with a credit given for the taxes paid to the state where the property is located.  For Alabama residents the state capital gains tax is 5%.

So-called "reverse exchanges" are becoming more popular since the IRS has put out a "safe-harbor" procedure to facilitate these transactions.  A PDF file link to that Revenue Procedure is found in my material on that subject.  A "reverse exchange" occurs when one must close on one's replacement property prior to closing on one's relinquished property.  My firm has formed Qualified Exchange Titleholder, LLC, specifically to perform the role as an "exchange accommodation titleholder" under Revenue Procedure 2000-37.  I also use this entity to assist taxpayers complete "development or improvement" exchanges.

 If you are a golfer and are doing an exchange which will bring you to the Gulf Shores, Alabama, area, perhaps we can get together for a round.  Check out these courses!   The weather forecast for Gulf Shores can be found here.  A trip to the Gulf Shores/Orange Beach area must also include a stop at America's Last Great Road House, the Flora-Bama.  

The following language is required pursuant to Rule 7.2, Alabama Rules of Professional Conduct:   No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.  This web site is designed for general information only.  The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Your comments are welcome.  And here is the poem for the troubled golfer.