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, […]
The Top Ten 1031 Exchange Misconceptions
Sometimes, the best intentions don’t quite get us to the finish line, but can leave us in a very painful spot. It’s best to steer clear of the pitfalls that can derail an exchange or limit the tax that can be deferred. With this goal in mind, we introduce our Top Ten 1031 Exchange Misconceptions: #1- If […]
Mixed-Use Exchanges / When 1031 and 121 Combine
What can you do if part of the property you are selling is your primary residence and another part is investment real estate? One of the options to consider is doing a 1031 exchange on the investment piece and taking advantage of the gain exclusion on the primary residence portion. The IRS addressed the tax […]
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 […]
Tick-Tock: Minding the Clock in 1031 Exchanges
One of the most common questions we hear is “How long must I own a property before I can do at 1031 exchange?” Unfortunately, this is a pivotal question that cannot be answered simply. Section 1031 of the Internal Revenue Code states that property qualified for an exchange must be “held for investment or used in a […]
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 […]
Why All 1031 Exchanges Are Not Tax-Free —- Here’s How to Avoid an Unhappy Surprise
If your plan is to complete a 1031 exchange that results in no tax being paid, then you need to understand the target value of the replacement property you must acquire. This may sound simple, but in practice, it trips up many investors—leaving them with tax to pay. Before we delve deeper into how to […]