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 […]
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, […]
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 […]
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. […]
Section 1031 can be used effectively to plan for major lifestyle changes. Use Section 1031 early, and use it often!
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 […]
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 […]
Entering into a Section 1031 Exchange should be done with careful consideration of your overall goals and objectives. The successful completion of an exchange requires that the old or Relinquished Property be replaced with new or Replacement Property of equal or greater value. Selecting the new property takes a certain amount of due diligence. If […]
Section 1031 is the most underutilized tax deferral tool still available to the US Taxpayer. There are two primary year end tax considerations when using Section 1031. This article describes these considerations.
While Section 1031 has been in the Internal Revenue Code since 1921, it has been enhanced and expanded numerous times since inception. The 1991 regulations provided several “safe harbors” to protect transactions from being disallowed. These “safe harbors” define the edge of safety and effect when an exchangor is entitled to the receipt of exchange […]