What is and How to use a 1031

Question

What is and how do I use a 1031 document

Steve Morris · Answer

What is and how do I use a 1031 document

1) Get your property in contract

2) Call your 1031 accomodator and tell him you want to buy another prop for tax deferral.

Dave Foster · Answer

@Emmanuel Enos, Maybe I can expand on that a little for you.  You use the 1031 exchange to sell investment property that has either appreciated in price or has been depreciated (tax write off) heavily.  For you it is a sale of investment property followed by a purchase of investment property.  But by following the process of the 1031 you get to indefinitely defer payment of that tax and/or depreciation recapture.

The power is that you not only don't have to write a check.  You get to use that deferred tax to purchase real estate that benefits you.  Just like an IRA or 401K.  You get to make money on the tax.

The process is exacting but you personally won't notice any difference from selling and buying other than some time constraints and reinvestment targets.

It does start with the sale and requires the use of a "qualified intermediary" in place prior to the closing of the sale who manages the process with you.

Will Fraser · Answer

https://www.biggerpockets.com/....

Emmanuel Enos · Answer

@Steve Morris thank you

Emmanuel Enos · Answer

Thank you Will

What is and How to use a 1031

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