Philadelphia partner David Shechtman authored an article for Exchanging Times, the newsletter publication of 1031 Corp. — specialists in 1031 tax-deferred exchanges.
The article discusses a recent unreported decision of the Pennsylvania Board of Finance and Revenue (BFR) that spells good news for taxpayers subject to the PA Personal Income Tax (PIT) who are engaging, or have engaged, in like-kind exchanges.
In its ruling, the BFR reversed the PA Department of Revenue’s denial of non-recognition treatment on a deferred exchange for a taxpayer whose accounting firm consistently prepared audited financial statements using the federal income tax accounting method. The BFR held that the Department's position clearly was at odds with its own Regulations and Bulletin 2006-07. BFR opinions cannot be cited as precedent by other taxpayers.
David, chair of the Tax Team in the Corporate and Securities Practice Group, noted: “Affected exchangers now can claim tax-free treatment for PIT purposes in more situations, and those who reported taxable income for PIT purposes in prior years (which are still open) may be eligible for refunds.”
Click on the PDF link above to view the full alert.