1031 Exchanges-Learn about 1031 Exchanges

1031 Tax Deferred Exchange of Real Estate

Section 1031 of the Internal Revenue Code (IRS) allows owners of investment and business properties to complete a "Like Kind Exchange." This allows you the opportunity to save thousands of dollars in capital gains taxes by exchanging, rather than selling these assets.

How it works

I can assist you by locating a qualified intermediary. Using a Qualified Intermediary (QI) ensures that you will receive favorable tax benefits during the exchange. This is required to facilitate the IRS requirements. The QI participates and represents the investor by acquiring and conveying properties and holding the sales proceeds. When you are ready to make your next real estate purchase, these sales proceeds can be used for your purchase.

Like-Kind Property Requirements

For Real estate, you can exchange land for condos, rental homes for apartments and vice versa. Like kind properties mean you must exchange real estate for real estate. The type of property is unimportant. One of the requirements is that the property you acquire must be at the same price or a higher price of the property you are exchanging out of. A new requirement is that the investment property be leased or you can demonstrate that you attempted to lease the investment property for at least 14 days per year.

Time Requirements

You must select a replacement property within 45 days after closing of the relinquished property. You are limited to identify up to three properties to acquire and you close on the new property within 180 days. Failure to meet these requirements will prevent you from completing a successful 1031 exchange.

Sound Interesting?

Please contact me and I will be happy to answer your questions. 1031 Tax Deferred Exchanges are excellent vehicles to build wealth.