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Improvements on Property Owned by a Related Party

While the IRS prohibits Taxpayers from selling a property and using the proceeds to improve property they already own, we now have a third private letter ruling permitting improvements on property owned by a related party.  (PLR 201408019)  The ruling allows an Exchange Accommodation Titleholder (“EAT”) to enter into a ground lease of 30+ years, construct improvements, and assign the ground lease to the Exchanger.

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