1031 basics, where to start?

5 Replies

I want to start learning the ins and outs of 1031’s and I expected to find a sticky thread with and article posted but didn’t see one, so where would you all suggest that I start?

@Bryan Cork . What type of education do you need? Here is the IRS link. I did one from a SFR into a commercial property. I had 2 lined up, but the first one failed because I wasn't able to close on the identified replacement property. You can identify up to 3 replacement properties when you sell. You need to close on the replacement within 180 days on one you have identified.

I was glad the second one worked perfectly. Placed the replacement property under contract, Sold the SFR, identified the replacement property on the form. Moved the funds into an escrow held by a 1031-specialized company. When I closed on the commercial, I used funds from the previous proceeds.

Hey Bryan-

That's a great question, and one I just read about in Dave Greene's excellent Long-Distance Real Estate Investing book. On a high level, here are the basics: 

  • it's a section in the tax code
  • allows you to avoid paying capital gains taxes on specific investments
  • Move profits from one property into another
  • Like kind properties same in nature or character
  • 45 days to id new properties to close on
  • 180 days to close on an identified property
  • Avoid taking possession of the money

Talk to your lender (and your CPA) about this as they can advise you on the rules for a 1031 exchange. I've also included links for more info on 1031s. Good luck! 

What is a 1031 Exchange?

FAQs about 1031 Exchanges

@Bryan Cork ,  Almost every QI out there with a web site has produced articles and how to's .  As long as they know what they're talking about the information will be good.  The IRS information is only as accurate as the words on the paper and most (99.9%) of the nuance of 1031 comes from case law adaptation that you'll never find on the IRS web site.  They have to let you do 1031s but they don't make learning about them easy.

QIs are the folks who live in this arena.  Go to the horses mouth.  I'll send a pm to you

@Henri Meli thanks for that link. good info, just what I needed.

@Erin Spradlin

@Max Cohen

Thank you guys as well, now i've got some homework to do.

form what I read on the IRS.gov link there are 3 basic types, a 1031 swap (simultaneous), a deferred (that's the 45 day identify 180 day close), and a reverse (this one I don't understand yet) does this sound correct?

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