Top 1031 Do’s and Don’ts
There are many details and nuances to consider when doing a 1031 exchange. We thought it might be helpful to address the most common do’s and don’ts that customers face in successfully executing and maximizing the tax benefits of a 1031 exchange. Here is a list of the most common advice we give to the questions […]
Mirror, Mirror: The Same Taxpayer Rule in 1031 Exchanges
One of the basic rules to complete a successful 1031 exchange is that the taxpayer selling the relinquished property must be the same taxpayer that buys the replacement property. There are times, however, when the party selling the relinquished property wants or needs to make a change in how the replacement property will be held. […]
Year-End Strategies: 1031s that Straddle Tax Years
The benefits of using a 1031 exchange when selling investment property are well known. But how do you maximize gain deferral when timing issues—like the end of a tax year—come into play? While there are some pitfalls to avoid when executing a 1031 exchange that straddles tax years, there are also some opportunities. Let’s examine the […]
1031 Strategies: How a Construction Exchange Can Save the Day
In today’s seller-friendly environment, some exchangers have determined that they can create value by finding an attractively priced replacement property or lot that can be improved. They conclude that paying a lower acquisition price plus the cost of improvements is a better choice than competing with all of the buyers in the traditional investment market. […]
1033 & 1031: Differences and Similarities
A 1031 exchange is an excellent tool to use to defer taxes indefinitely that might otherwise be due on the sale of investment property. Similarly, there is also tax relief available to investors when their property is acquired by a governmental authority or destroyed. The rules governing these events are covered under Section 1033 of […]
Successful 1031 Strategies for Transitions: Marriage, Death & Divorce
Few events do more to change a person’s course in life than marriage, death or divorce. Issues can arise when one of these events comes up in the middle of a 1031, determining its success or failure. Thankfully, as blessed or as difficult as circumstances surrounding these life changes can be, through careful tax planning, […]
1031 Strategies: The Puzzle of a Partnership
We all know that an individual or an entity can sell an investment property and complete a 1031 exchange, indefinitely deferring any tax due. But what if the property being sold is owned by a partnership or multi-member LLC and one or more of the partners wants to go their own way? In this scenario, is […]
Compounding – 1031 Builds Wealth
While many investors turn to a 1031 exchange because they don’t want to pay the tax on the sale of investment property, few stop to consider the wealth building potential this tool offers. By deferring the tax and keeping your equity working, you gain the benefit of compounding your money. Einstein was purported to have […]
Partial Exchanges- It’s Not “All or Nothing”
A partial exchange, whether planned or by happenstance, can be a viable exchange strategy. The words “can be” imply that there are circumstances when this would not yield a positive outcome. A partial exchange will result in some taxable gain being triggered; however, it could also mean having to pay all the tax- Ouch! Understanding […]
Reverse Exchange Strategies – It’s All About Time
Most investors know that in order to complete a successful 1031 exchange, they sell their relinquished property and have 180 days to buy the replacement property. What can be done when the perfect replacement property is found and must be acquired before the existing property can be sold? Must all the benefits of a 1031 […]