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 […]
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 […]
1031 Strategies: Refinancing Around An Exchange
For investors, one of the main reasons to use a 1031 exchange is deferring any tax due so that any return they earn can be on all of their equity going forward. For the gain deferral to be maximized, the exchange rules require that the purchase price of the replacement property be the same or […]
1031 Strategies: Converting Investment Property into Your Dream Retirement Home
A number of investors own both a primary residence and an investment property or two. They often have an interest in selling one and transitioning into the other, while limiting the tax liability through smart tax planning. While the IRS has issued direct guidance on this subject, there is still confusion among many investors about […]
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 […]
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. […]