Wednesday, March 18, 2009 at 06:06PM | Staff Trademarks and Tradenames Qualify for 1031 Exchange Treatment
The Internal Revenue Service appears to have somewhat reversed or at least altered its position regarding the 1031 exchange of trademarks and/or trade names and whether or not trademarks and/or tradenames would qualify for 1031 exchange treatment.
The Service took the position in its Technical Advice Memorandum 200602034 (TAM 200602034) that Goodwill would not qualify for 1031 exchange treatment. Generally, trademarks and/or trade names have been included in the definition of Goodwill by the Internal Revenue Service. Taxpayers that previously structured 1031 exchanges on trademarks and tradenames were walking a fine line and taking an aggressive position.
However, the Internal Revenue Service issued Technical Advice Memorandum 200911006 (TAM 200911006) that states that trademarks and trade names will be considered separate and apart from Goodwill and can qualify for 1031 exchange treatment.
Great news for taxpayers selling property or assets that include trademarks or trade names.
