Can I take cash from my 1031 exchange?
Wednesday, September 21
When an investor wants to sell a business or investment property and defer capital gains taxes, one of the questions that often gets put on the table is whether he or she can pull some money out of the deal.While the whole point of conducting a #1031 exchange is to defer all capital gains taxes o...
Beware Hidden "Boot" Risks In A 1031 Exchange
Monday, September 19
One of the golden rules of 1031 exchanges is that if you receive any cash out of the transaction, it is considered “boot” and subject to capital gains taxes. Most investors understand this.But there is one element of “boot” that often catches investors off guard, and it has to do with mortgages a...
How broad is the definition of "like-kind" in a 1031 exchange?
Sunday, September 18
Although the IRS does not set forth a definitive description of what “like-kind” means, they do offer guidance. Both properties involved in a 1031 exchange must be “the same nature or character, even if they differ in grade or quality.”From my own practical experience working with 1031 exchanges ...
What if my replacement property costs less than my sold property?
Friday, September 16
Even investors who understand the basics of 1031 exchanges sometimes get caught out when it comes to finding replacement property that is equal or greater in value to the relinquished property. Perhaps the investor has located the right replacement property and it actually costs less than the inv...
The "Same Tax Payer" Rule for 1031 Exchanges
Friday, September 09
When it comes to completing a valid 1031 exchange, it’s all about rules. Knowing them. Understanding them. Following them. The IRS is not a very forgiving entity when it comes to bending rules or even taking a generous rule towards interpreting compliance with their complicated tax code. So to ma...
When should you begin a 1031 exchange?
Friday, September 09
The timing of when you set up your 1031 exchange is critical to its success. I often receive inquiries from investors, after they have closed on the sale of their relinquished property, seeking my services as a qualified intermediary for their proposed 1031 exchange transaction.Unfortunately, in ...