How do I identify a 1031 exchange property?
It’s quite simple. The identification period begins the day an investor closes on the sale of their relinquished property. The investor must identify one or more replacement properties before this period of 45 days ends. Your Qualified Intermediary should help you with the identification of your property. Besides, there are other ways as well. Talk to our 1031 experts on 888-993-2835 to know more about 1031 identification process.
Are reverse 1031 exchanges considered legal?
A reverse 1031 exchange is as legal as a delayed or other forms of 1031 exchange. There are 4 kinds of 1031 exchanges and a 1031 investor could choose any one of them. All these four 1031 exchanges offer same benefits and only differ in the way they are completed. To know more about reverse exchange and other forms of 1031 exchanges, you can reach out to our 1031 experts on 888-993-2835.
What are the time limits to complete a section 1031 deferred Like-kind exchange?
As per the rules established by the IRS, every 1031 Exchange must be completed within 180 days. Known as the Exchange Period, the time limit of 180 days begins the day an investor closes on the sale of their relinquished property. To know more about 1031 exchange deadlines, reach out to our 1031 experts on 888-993-2835.
In a delayed exchange, is there any limit to property value when identifying by using the two hundred percent rule?
The IRS has framed a set of guidelines for all kinds of 1031 exchanges. One out of those guidelines states the limitation on the number of replacement properties an investor can identify. There are three property rules that work during the identification period in a 1031 exchange. The 200% Rule states that a 1031 investor can identify any number of replacement properties as long as the combined market value of all the identified properties doesn’t exceed 200% of the value of the relinquished property. Find out more about 1031 property rules, talk to a 1031 expert on 888-993-2835.
Are there restrictions for deferred and reverse exchanges?
A reverse exchange is one of the four tax-deferred exchanges that investors use to defer capital gains tax during property exchange. There are a few limitations or conditions for doing a 1031 exchange. Like the value of the replacement property needs to be equal to or greater than the value of the relinquished property. Similarly, there are a few more conditions that must be fulfilled by 1031 investors. Talk to our 1031 experts to know about 1031 exchange guidelines.
Should identifications be made to the intermediary or an attorney, escrow, closer or title company?
In a 1031 exchange, the identification is generally made to the Qualified Intermediary or QI. A QI is an individual responsible for handling 1031 exchanges on behalf of investors. They also help in the identification process. Know more about a 1031 Qualified Intermediary’s duties, talk to our 1031 experts on 888-993-2835.
Can the 45- and 180-calender day tax-deferred exchange deadlines be extended?
The IRS has strict rules when it comes to 1031 exchange deadlines. Under no circumstances, these deadlines can be extended, as there is no provision for extension of deadlines in 1031 exchanges. Learn more about 1031 exchange deadlines, react our to our impaneled 1031 experts on 888-993-2835.
Who is and how does 1031Xchange works?
1031 Xchange was developed with a motive to provide a range of quality properties for its investors who are planning to do a 1031 exchange. The 45 day Identification period can be very tough period for the 1031 investor. 1031 Xchange can ease your toughness with its on-line turnkey solution. Our experience team of securities and real estate professionals has created an online marketplace that can accomplish this for you within days. The burden of dealing with the tenants, the toilets and the trash are now over.
We not only allow you to diversify your investments but also help you to purchase variety of properties across different asset classes using Delaware Statutory Trust (DSTs). For consultation and assistance regarding 1031 exchange you can also call – 888-993-2835 or email us at info@1031Xchange.com
What is a Tax Deferred Exchange?
1031 exchange also known as tax-deferred exchange represents a simple, strategic method for selling one existing qualifying property and acquiring another qualifying property within a specific time frame. Although the process of selling one property and buying another is identical to any standard sale and purchase scenario, an exchange is different because the entire transaction is memorialized as an exchange and not as a sale. This exchange is different because under this the properties are exchanged and not merely sold or bought, which ultimately allows the taxpayer to qualify for deferred gain treatment. Therefore we can say that sales are taxable, but exchanges are not.
The deferment of taxes is done within Section 1031 of the Internal Revenue Code where we can find the core essentials necessary for a successful exchange. Additionally, the exchange is always done within the like-kind properties.
What are the benefits of 1031 Exchange?
1031 exchange helps the investor to defer the capital gain taxes. An investor who wants to acquire replacement property after the sale of his existing property should consider an exchange. If the investor does not exchange his property through 1031 exchange then he/she has to necessitate the payment of capital gain taxes in amounts which can exceed 20%-30%, depending on the combined federal and state tax rates. In other words, if the investor purchases the replacement property without the benefit of an exchange, then the power of buying is dramatically reduced and represents only 70%-80% of what it did previously.
Must all exchanges close at the same time?
No, all the exchanges do not close at the same time anymore, but there was a time when all the exchanges have to be closed on a simultaneous basis. Nowadays a significant majority of exchanges are closed as delayed or deferred exchanges.
Does like-kind mean purchasing the same type of property which was sold?
Although the definition of like-kind has often been misinterpreted to mean that the property being acquired must be utilized in the same form as was the property being exchanged. In other words, apartments for apartments, hotels for hotels, farm for farm, etc. However, the true definition is again reflective more of intent than use. Accordingly, there are currently two types of property, which qualify as like-kind:
Property held for investment, and, or Property held for productive use in a trade or business.