1031 Tips: Being Brilliant at the Basics
Just like in baseball, when planning for a 1031 exchange, understanding certain basics will help you have a successful turn at bat. Being brilliant at the basics will help you hit a home run. With a 1031, your success primarily hinges on having a basic understanding of this transaction and paying attention to certain key factors. To […]
What Qualifies for 1031? Investment Property v. Inventory
When it comes to qualifying for a 1031 exchange, not all investment property is created equal. IRS Code Section 1031 allows the exchange of property that is “held for investment.” Within this context, the meaning of the phrase “held for investment” is very specific. Property held for investment does not receive the same tax treatment […]
Info to Go: The 1031 Like-Kind Requirement
There are several elements that must be satisfied in order to qualify for the tax deferral that a 1031 offers. One requirement is the property being sold and the property being acquired must be “like-kind”. Despite the increased number of 1031 exchanges being done, this topic is still one of the most misunderstood aspects of exchanging. […]
Top 10 Reasons to 1031 Exchange
#10 To consolidate or diversify real estate investments. By selling multiple properties and buying one larger replacement property, you lessen management responsibilities and may also be able to geographically consolidate property. For those investors who own one larger property, exchanging can allow them to sell and diversify into other types or locations without having to […]
Relation Complication: 1031s with Related Parties
One question that often arises in our conversations about 1031 exchanges is if related parties can play a role. Often, exchangers want to know if they can sell to or buy a property from a family member, related entity, or trust that they control and still have a valid exchange. In a standard 1031, the taxpayer […]
Why Can’t You Send Me My Money?
The 1031 process has a number of rules and regulations critical to its success. By using the services of a qualified intermediary, most exchangers are blessedly unaware of a number of them as the needed documents have already been crafted and tailored to abide by the rules. However, frustration can arise when exchangers misunderstand the […]
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. […]