Exchange Audit Support
Comprehensive support and documentation preparation for potential IRS audits of exchange transactions.
Exchange audit support services are designed for taxpayers and tax professionals in New York, NY who need comprehensive preparation for potential IRS audits of their 1031 exchange transactions. This service covers the entire exchange process, from initial planning through post-exchange audit preparation, ensuring that all exchange activities are thoroughly documented and defensible.
This service is crucial for anyone concerned about IRS scrutiny of their exchange, particularly those with high-value transactions or complex exchange structures. Our audit support includes documentation review, compliance analysis, and preparation of comprehensive audit packages that demonstrate exchange qualification.
During the 45-day identification period, we help establish audit-ready documentation of identification activities and rule compliance. Throughout the 180-day exchange period, we maintain detailed records of all exchange activities, communications, and transactions that may be subject to IRS review.
Our New York, NY-based audit support team specializes in exchanges involving New York City and statewide properties, understanding the unique audit risks associated with high-value urban real estate markets. We work closely with qualified intermediaries and qualified escrow holders to ensure secure and documented fund transfers.
We provide proactive audit preparation by reviewing exchange structures for potential IRS concerns, preparing detailed chronologies of exchange activities, and organizing all supporting documentation in audit-ready formats. Our service includes analysis of property valuations, exchange agreements, and compliance with all IRS requirements.
Working with tax attorneys and accountants, we help develop comprehensive audit response strategies and prepare taxpayers for IRS inquiries. Our approach focuses on demonstrating clear compliance with all exchange rules and regulations to minimize audit risk and ensure successful defense of the exchange's tax-deferred status.
What's Included
- Comprehensive audit risk assessment and planning
- Complete documentation organization for IRS review
- Exchange chronology preparation and timeline analysis
- Qualified intermediary documentation review
- Property valuation and appraisal record organization
- Identification rule compliance documentation
- Boot analysis and supporting calculations
- Audit response preparation and strategy development
Common Situations
High-value Manhattan property exchanges with significant tax deferral amounts
Complex multi-property exchanges requiring extensive documentation organization
Exchanges involving related parties where additional IRS scrutiny is expected
Example Engagement
Example of the type of engagement we can handle
Service Type:
Exchange Audit Support
Location:
New York, NY
Scope:
Complete audit preparation for a $8M mixed-use property exchange including documentation organization, compliance analysis, and audit response strategy development
Client Situation:
Property investor with complex exchange involving multiple replacement properties and significant tax deferral
Our Approach:
Comprehensive review of all exchange documentation, organization of audit-ready files, analysis of potential IRS concerns, and preparation of detailed audit defense materials
Expected Outcome:
Well-organized audit package and response strategy that demonstrates clear exchange compliance and minimizes audit risk
Frequently Asked Questions
What triggers IRS audits of 1031 exchanges in New York, NY?
IRS audits of 1031 exchanges in New York, NY can be triggered by high-value transactions, complex exchange structures, or inconsistencies in tax returns. Our audit support helps identify potential audit triggers and ensures all New York, NY exchange documentation is organized and defensible for IRS review.
How do identification rules impact audit risk in New York, NY exchanges?
Identification rules are a common audit focus for New York, NY exchanges. We ensure that all identification activities within the 45-day period are thoroughly documented, including property search records, identification notifications, and compliance with the specific identification rules used (200% rule, 95% rule, or 3-property rule).
What documentation is needed to defend against boot claims in New York, NY audits?
To defend against boot claims in New York, NY audits, we prepare comprehensive documentation showing that all exchange proceeds were reinvested in like-kind replacement property. This includes detailed records of fund transfers through qualified escrow, property acquisition costs, and calculations proving no cash or other property was received by the taxpayer.
How long should audit documentation be retained for New York, NY exchanges?
Audit documentation for New York, NY exchanges should be retained indefinitely, as IRS audits can occur many years after the exchange. We help organize permanent audit files that include all exchange agreements, qualified intermediary records, property documentation, and IRS correspondence for long-term retention.
What role does the qualified intermediary play in New York, NY exchange audits?
The qualified intermediary's role in New York, NY exchange audits is crucial for demonstrating proper fund handling. We ensure that qualified intermediary agreements, escrow account records, and all communications are properly documented and available to show that funds were held securely and transferred according to IRS requirements.
How do we prepare for IRS correspondence audits of New York, NY exchanges?
For IRS correspondence audits of New York, NY exchanges, we prepare comprehensive response packages including detailed chronologies, supporting documentation, and explanations of exchange compliance. Our audit support ensures that responses are timely, complete, and demonstrate clear compliance with all 1031 exchange requirements.
Educational content only. Not tax, legal, or investment advice. 1031 defers income tax on qualifying real property and does not remove transfer or documentary taxes.
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Contact us to discuss your audit preparation needs in New York, NY. We can share references upon request.
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