Here are some 1031 exchange rules that you will need to consider when doing a 1031 Exchange. 45 Days To Nominate. 180 Days to Close Once you sell your investment property, you must close on the new property within 180 days. However, you must nominate a replacement property within the first 45 days, leaving you… Continue reading Five things you should know – 1031 Exchange rules
QUESTIONS When should you use a 1031 Exchange? There are two main questions to ask yourself: 1) Will I incur capital gains tax when I sell my investment property? 2) Do I want to purchase a replacement property? You may also want to utilize a 1031 exchange to carry out a mix of business strategies.… Continue reading When can you use a 1031 exchange in real estate?
The United States Congress enacted the first exchange statute through the Revenue Act of 1921. The act, which allowed both like-kind and non-like-kind exchanges for a legal, regulated tax-deferred exchange had three purposes: To avoid unfair taxation of investments in property that are ongoing To encourage active reinvestment For administrative convenience The third became irrelevant… Continue reading The History of 1031 Exchanges
A wise investor’s vehicle for deferring capital gains taxes or depreciation recaptures, 1031 exchanges were first adopted by the IRS in 1954. That’s when the present day definition of a like-kind exchange was adopted. Decades later, there are still many misconceptions about how these exchanges work. • Like-kind means “exactly the same.” The IRS requires… Continue reading Misconceptions About 1031 Exchanges
A 1031 exchange has some challenges built in, and a key obstacle to exchange success can be identifying suitable replacement properties within 45 days and securing financing and closing on the purchase within 180 days. In a Delaware State Trust, investors are not direct owners of the real estate; they hold beneficial interests in the… Continue reading Avoiding Financing Obstacles Through a DST
On paper, your real estate investments have been a great success. You bought three rental houses 20 years ago for $150,000 each. They’re now fully depreciated, and you can net $450,000 on each. You’ve been a good—and sometimes great—landlord. So what’s not to love. The calls at 1 a.m. because the boiler shut down on… Continue reading Delaware State Trust for Landlords Who Are Tired of the Management Hassles
On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act, enacting sweeping changes to the U.S. tax framework which took effect at the beginning of 2018. The new tax framework had one major change to Section 1031 of the IRS tax law: no longer can personal property, including franchise licenses, machinery and… Continue reading The New Tax Law and Like Kind Exchanges
The Treasury Department governs 1031 exchanges, and they’ve made one thing very clear: These are not do-it-yourself real estate ventures. In fact, you won’t be able to use your parents, child, or sibling, or even your attorney, real estate agent, or CPA as a middle person in the exchange and still expect to defer capital… Continue reading What Is a Qualified Intermediary?
Who Qualifies? If you own an investment or business property, you can qualify for a 1031 exchange, whether you’re an individual, C or S corporation, partnership, or LLC. Same Taxpayer The buyer of the replacement property must be the same tax entity as the seller of the relinquished property. A Qualified Intermediary A Qualified Intermediary… Continue reading A Quick Look at 1031 Rules
Internal Revenue Service tax code 1031 relates to real estate exchanges, allowing investors to defer capital gain tax payments on the sale of the property by reinvesting the proceeds into another business or investment. It is one of the most underutilized sections of the tax code, even though it offers many benefits to investors who… Continue reading What I Learned About 1031 Exchanges That Can Help You, Too