In its simplest terms, Qualified Intermediaries (QI), facilitating Section 1031 Exchanges, act as a third party in the sale of Relinquished Property (old property). The QI’s job is twofold: a) memorialize and document the intent of the taxpayer and b) function as escrow agent for the net proceeds from sale. Section 1031 is a tax […]
Section 1031 or Section 1033?
Section 1031, Tax Deferred Exchanges, can be used in concert with or as substitution for Section 1033, Involuntary Conversions- when a property is completely or partially destroyed by fire, natural disaster, theft or seizure or other taking or condemnation, including the disposition of the property upon threat or imminence of condemnation or eminent domain. Section 1033 […]
Section 1031 Strategies for Conserving Open Space
State by state, individual efforts have been made to control sprawl but it has been a slow and arduous task and the controls have not been nearly as effective as a regional or national approach. Several national initiatives have bubbled to the surface to foster conservation efforts. Since 2004, the Departments of Defense, Interior, Agriculture, […]
Real Property Can Be Exchanged (Sometimes)
It’s important to understand that there are three distinctively different types of real estate, some can be exchanged, some are prohibited from tax deferred exchange treatment. The three types are personal use, business/investment use and dealer property. Favorable treatment exists for the sale of a personal residence if the property has been the primary residence […]
Is It Too Late To Exchange? – There May Be a Solution
Each year we receive calls from taxpayers who have sold their investment property before engaging us to represent them as their Qualified Intermediary. They are still in possession of the cash and have just settled on Replacement Property to acquire and want our assistance in structuring the transaction to get the best tax deferred result. […]
Tax Deferred Life Style Change
Section 1031 can be used effectively to plan for major lifestyle changes. Use Section 1031 early, and use it often!
Warning to Attorneys & Accountants in New Hampshire Practice
By George E. Foss III The New Hampshire Department of Revenue (DRA) has recently developed a new audit tactic that could cost your Clients a lot of money, and expose you or your firm to professional liability. The intent of this message is to describe the current situation. With the advent of the Single-Member […]
What is Like-kind Property?
Myth Busted: “Like-kind” means ANY realproperty can be Exchanged for ANY real property. Don’t get caught with the assumption that land can’t be exchanged for an apartment building. When applied to a Tax Deferred Exchange, the term “Like-Kind” is a term of art that simultaneously means four things: Location, Type, Use and Value. Location of Property: For […]
The Section 1031 Police
We are often asked how Section 1031 transactions are monitored by the Internal Revenue Service (IRS) and whether a 1031 police force exists to monitor taxpayer actions. The truth is that in nearly three decades of practice, we have never been informed of the existence of this authority. However, we regularly point out to clients […]
Cash: The “Fatal Attraction”
Real estate is a solid, practical, easy to understand investment vehicle. It is readily available in a variety of forms all across the United States. It can be acquired with cash, debt or exchanged for existing property holdings. Section 1031 Exchanges of real estate are the best way to maximize your cash flow and equity […]