TAX · SECTION 721 · 2026
Section 721 contributions: basis carryover and the 7-year hold
A 721 UPREIT contribution defers gain, but basis carries over into the OP units and a seven-year covenant governs when built-in gain can crystallize.
Tax Deep-Dives · 721 UPREIT · Federal · State
Section 721, state clawback, and the tax layers most exchanges get wrong.
Federal deferral under Section 1031 is straightforward. Section 721 UPREIT contributions are not. State tax is where the second layer of complexity lives: clawback statutes, multi-year filing obligations, withholding rules, and the mechanics of replacement states with no income tax. We publish detailed analysis on each dimension.
TAX · SECTION 721 · 2026
OP unit distributions, phantom income, and conversion to REIT shares
OP unit distributions reduce basis, taxable allocations can outrun cash, and converting units to REIT shares is the second taxable moment.
TAX · SECTION 721 · 2026
The step-up at death for OP units, and the state tax layer
OP units held at death receive a Section 1014 basis step-up that eliminates deferred gain, but state sourcing rules can outlive the federal fix.
TAX · SECTION 721 · 2026
Section 721 UPREIT tax treatment: contribution, basis, and the path to REIT shares
A 721 UPREIT contribution defers gain at the moment property is exchanged for operating-partnership units, but the basis carryover, distribution rules, and eventual conversion to REIT shares trigger consequences that look nothing like a 1031.
TAX · CALIFORNIA · 2026
California 1031: Clawback, Form 593, and the Mello-Roos question
California's Franchise Tax Board can follow a 1031 investor across state lines for years after the exchange closes. Understanding Form 593, the clawback statute, and Mello-Roos obligations is required reading before any California sale.
TAX · MULTI-STATE · 2026
No-state-tax 1031 markets: TX, FL, NV, WA mechanics
Four major 1031 destination states impose no personal income tax on capital gains from real estate sales. The mechanics differ by state, and out-of-state buyers face distinct considerations in each market.