1031 Exchanges

Good information from Brenda DeArmond

Own an investment property? Did you know you can defer any capital gains? This is done through a 1031 Exchange. When using the 1031 Exchange you will defer any such gain until sometime in the future. As long as you purchase another investment property of “like-kind” of equal value, you will qualify. This is a definite time line that you must follow. Once your first property is sold, you have 45 days to identify a replacement property. The exchange must be completed by the date that is 180 days after the transfer of the relinquished property, or the due date of the taxpayer’s federal tax return for the year in which the relinquished property was transferred, whichever is earlier.
You will need to contact a qualified intermediary. There are several companies that specialize in 1031 exchanges. The intermediary cannot be the taxpayer. The intermediary acquires the relinquished property and transfers it to the buyer. Then the intermediary holds the sales proceeds to prevent the taxpayer from having receipt of the funds. The final leg of the transaction the intermediary acquires the replacement property and transfers it to the taxpayer.
Timelines are very important. For further information, contact an intermediary of your choice of feel free to give me a call or email me.