1031 exchange help near amesbury ma

[Richard Tibbetts]

Never complete a 1031 exchange, looking for help near by. (Amesbury MA)

Situation

My 3 family has an accepted offer of $660,000 (pending bank approval)

I paid $380,00 and owe $336,000.

I have 56,000 in depreciation that i have claimed and will need to account for.

The potential replacement property will cost $330,000.

Do i have to invest all of my gains into the new property?

Will i be able to pocket anything in this transaction?

Who is needed to complete the 1031 exchange?

Any help is appreciated, thanks for everyones time.

[Bill Exeter]

Hi @Richard Tibbetts, 

It is actually your “Net Sale Price” that matters in determining the minimum Purchase Price or purchase amount for your replacement property.

The Net Sale Price is computed by taking your Gross Sale Price ($660,000) and subtracting your routine “permissible selling expenses.” The routine permissible selling expenses do not include everything on your closing or settlement statement. You would only subtract routine permissible selling expenses such as:

Permissible Selling Expenses and Closing Costs:

• Owner's title insurance premiums
• Escrow agent, settlement agent or closing attorney fees
• Real estate agent’s or broker's commissions
• Finder fees or referral fees
• 1031 Exchange Qualified Intermediary fees
• Documentary transfer taxes
• Recording or filing fees
• Attorney fees and costs related to the disposition or acquisition
• Tax advisor fees related to the disposition or acquisition

You would NOT subtract any non-permissible operating expenses or costs nor any lender or financing related costs such as:

Non-Permissible Operating Expenses, Lender or Financing Costs or other Closing Costs:

• Financing or lender costs such as loan fees, loan points, appraisal fees, mortgage insurance premiums, lender's title insurance policy premiums, and other loan processing fees and costs
• Prorated Property taxes
• Prorated rents
• Insurance premium payments
• Security deposits
• Payoff of credit card balances
• Repairs and/or maintenance costs

You Net Sale Price is probably going to be around $625,000 (ish).  This would be the approximate amount that you would need to reinvest in order to defer all of your income tax consequences.  You own an asset that has a net value of $625,000 (ish) and you are permitted to defer the payment of your taxes as long as you remain fully invested at this level.