This article was reposted with permission by Chris Hamilton, Law offices of Young Wooldridge, LLP. Click here to contact. PART 1 This post is the first part of a two-part post describing a vital tax provision, IRC 1031. Part 1 will outline its operation and perceived benefits, while Part 2 will present some of the more common arguments against […]
Archive | Section 1031 Basics
Use of Condo By Son Blows 1031 Exchange For State Tax
Today I read an article on Forbes.com by an excellent 1031 resource Peter J. Reilly. Peter’s article explained how a Minnesota taxpayer exchanged raw land for a condo in Idaho. When the Minnesota tax department reviewed the transaction 4 years later they discovered that the taxpayer’s son had been living in the condo after the purchase, […]
The Planned Exit Strategy
While cash is always the gold standard, touching it can lead to unintended and expensive tax consequences. If the sale of investment assets leads only to cash, the long hard work of achieving equity can be diminished by over 30%. A strategy that utilizes a Section 1031 approach can keep all of the cash intact […]
When is Cash a Problem?
We are often asked if property can be exchanged and still provide some cash for other immediate needs? The short answer is yes, however, If you elect to take cash, it will be immediately subject to significant tax. The very tax you are trying to avoid is triggered (up to the amount you touch) […]
Beware of State Clawbacks when Using Section 1031
We have conditioned our clients to expect that state capital gains tax can be deferred along with the federal tax exposure by utilizing Section 1031 for their exchanges. It is true, most states will honor the deferral as long as the gain is being rolled into the new property. However, you should be aware that […]
The Sticky Business of Related Parties
Real estate investors who buy & sell from related parties often get blind sided by related party rules when using Section 1031.
“My accountant told me to just pay the tax…….”
We hear this troubling refrain too often. It seems that many accountants and attorneys will tell their clients that a Section 1031 exchange is cumbersome and just delaying the inevitable. Some advise that the tax rates today are the cheapest you will ever see, “It’s easier to just pay the tax” they say. In far too […]
Thinking About Selling Your Vacation Home? The Time To Start Planning is NOW!
There are two types of real estate that can be sold with advantageous tax treatment, your primary residence and your business/investment property. Favorable treatment exists for the sale of a personal residence if the property has been the primary residence of the taxpayer for two of the preceding five years. Section 121 of the Internal […]
Section 1031 Exchanges Serve as Vial Stimulant for Economic Growth
PRESS RELEASE — Release Date: April 1, 2013 Section 1031 Like-Kind Exchanges Serve as Vital Stimulant for Economic Growth After several years, real estate values are beginning to recover and activity is steadily increasing. It’s a promising trend that needs to be supported, not thwarted. IRC Section 1031 like-kind exchanges are one of the best ways […]
Did Section 1031 Fall Off the Fiscal Cliff ?
No, not at all. While the discussion (if you can call it that) in Washington is for more streamlined tax parity, the new tax rates overwhelming approved in the American Taxpayer Relief Act of 2012, and signed into law on 1/3/2013, had little impact on 1031. If anything, it is a tax strategy not to […]