The document discusses the legal concept of eminent domain and the difference between public benefit versus public use. It summarizes a court case where the City of Tempe argued that taking private property constituted a public benefit, rather than the required public use. The document also explains some key differences between 1033 Exchanges and 1031 Exchanges for tax purposes when property is seized under eminent domain.

1. ©JacksonWhite, P.C.
February 21, 2013 (2013) All Rights
Reserved

5. EMINENT DOMAIN
“It‘s the Government’s Term for
Giving Me Your House”

10. PUBLIC BENEFIT vs. PUBLIC
USE

13. CITY OF TEMPE ARGUED FOR A
“PUBLIC BENEFIT”

49. A 1033 Exchange does not require the use of a qualified
intermediary (you can take the proceeds of the sale as
long as you reinvest them according to the rules within 2
to 3 years) while a 1031 Exchange requires the funds be
placed with a neutral third party. Also, the taxpayer can
complete the exchange by making improvements in
property already owned unlike a 1031 exchange that
requires that a new property be purchased.
Property owners should carefully review their situation
with their tax advisor in both the planning and execution
phase of doing a 1033 Exchange.