Section 1031 law does not allow you to sell a property to, or buy a property from, a related party if your motive is tax avoidance. But the basic rule is so vague and ambiguous that it leads to a lot of calls from clients and inquiring potential clients wondering what they can or cannot do when the parties are related.
First, let's define what a related party is; who is "related" to you?
The code defines a related party as someone that is closely related to you by blood: your parents, grandparents, kids and grand kids. It also includes your brothers and sisters, and of course, your spouse. Nieces, nephews, aunts and uncles, to name a few are, for our purposes, not related to you.
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