What You Want To Know About 1031 Exchanges

Dated: 01/11/2015

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Are you considering a 1031 exchange this year? Contact me for assistance selling and locating a perfect exchange property. To start enter your search criteria at the right to locate properties for your exchange. If you don't see what you like call me directly (916) 642-6333 or email me at carterproperties @gmail.com.
 

Some Important Information about 1031 Exchanges

A 1031 Exchange is a tool for deferring capital gains taxes on the exchange of like-kind properties. This tax-savings strategy can help avoid a tax liability when selling one investment property and buying another. However, the IRS has identified loopholes that guards against outright tax avoidance by instituting certain restrictions. There are time limits you must be aware of also. Simply, first identify the replacement property within 45 days of closing, and acquire the replacement property within 180 days of closing. You also must use a qualified intermediary who holds the funds until such time as the transaction for the acquisition of the replacement property is ready to close. After the close the qualifying intermediary delivers the property to the taxpayer all without the taxpayer ever having receipt of the funds and therefore there is no gain or loss recognized or claimed for income tax purposes.

It can be complicated and why you should seek professional help when doing a 1031 exchange. If you’re considering a 1031 exchange here is a list of items you should learn about.

1. A 1031 Isn’t For Personal Use

3. “Like-Kind” Is Broad

4. You Can Do a “Delayed” Exchange

5. You Must Designate Replacement Property

6. You Can Designate Multiple Replacement Properties

7. You Must Close Within Six Months

8. If You Receive Cash, It’s Taxed

9. You Must Consider Mortgages and Other Debt

10. Using 1031 for a Vacation House Is Tricky


Again it is advisable that a qualified CPA and 1031 exchange intermediary be consulted prior to taking action.

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