Until 1989 beneficial shares in a Land Trust could not be exchanged tax free under IRS Code Section 1031. The tax court subsequently ruled on a case that "when beneficiaries of two land trusts (which were essentially grantor trusts) made an exchange of their beneficial shares, the doctrine of substance over form swept away the mere fact that they were just trading pieces of paper and imputed an exchange under Code Section 1031." Therefore, it is possible to exchange (tax free) beneficial shares of one Land Trust for the shares of another Land Trust.

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