Related parties add another rule set.
Section 1031 includes special provisions for exchanges involving related parties, and the Form 8824 instructions include dedicated related-party reporting. Indirect structures can also raise related-party issues.
Because ownership relationships, holding periods, intermediary structure and subsequent dispositions can affect the analysis, related-party transactions should be flagged before documents are signed or closings are scheduled.
Escalation question
Is any party, entity owner, seller, buyer or replacement-property counterparty related to the taxpayer under the applicable federal definitions? If yes, send the structure to qualified tax counsel early.