All Forum Posts by: Kyle Kadish

@Shirley Gregory you could attempt a 1031 exchange, with the intent of purchasing an investment property. Maybe you are unable to rent out the replacement property, and convert it to your primary residence. Or rent it out for a year, and move in yourself.

@Pauline Zhao. Royalty streams can qualify through An exchange, with an income. The basis can be depleted below $0

@Lincoln Daniel. The Commonwealth of PA is non-conforming for 1031 exchanges. While federal taxes are deferred, they are still due to the state.

@Jeremy Williams is the Florida property already under contract? Rather than selling, what about a refi to use some of the equity for the additional building?

@Nathan Hood prior to changes in the Tax Cut and Jobs Act, taxpayers were able to exchange any like-kind [personal or rea]l property for like-kind (artwork for artwork). Now, the 1031 provisions are exclusive to real property (i.e. real estate).

Depending on the value, you might wish to explore the Deferred Sales Trust strategy which allows for the deferral of gains taxes, while using the proceeds in any manner you wish.

@Arthur Means re:1031, the only requirement is investment property. A single family can be exchanged for a multi, office building, warehouse, raw land, even mineral rights. The phrase like kind refers to use, not type.

It is important, if you conduct an exchange, to have the Qualified Intermediary (QI) in place prior to the sale of your property.

@Toshiki Hoshino,

Simple calculation is sale price less basis. Your gain is 1.2mm, and if you conduct an exchange, you want to purchase for that much or more to defer tax liabilities. Using your numbers, you will be left with $800k boot (1.2mm-400k).

A few considerations:

- purchase additional like-kind property. Like-kind has a very broad definition of any real property used for investment. This could be as exotic as mineral rights, or passive investments such as Delaware Statutory Trusts.

- if only looking to purchase $400k or replacement property, maybe not conduct an exchange to have the flexibility of buying on your own timeline versus the strict rules of the tax code.

It would likely be easier, and certainly less expensive to conduct a delayed exchange by setting a closing date for the replacement property 60 days out as well.  Two months isn't a massive timeframe, and most sellers should be open to that.

If already in the exchange period, and the excahnge agreement did not incude a defeasance clause mentioning the Deferred Sales Trust as a rescue, your QI might not release the funds for that reason.

@Denise Parent sent you a PM