Case Study 1 An locally-based CPA describes the way their client sold an investment property and was required to pay a significant capital gains tax as well as depreciation recapture. There was no other option that a direct 1031 exchange to reduce taxes for the client. Capital gain and recapture depreciation tax could be substantial as the property appreciated …
As we’ve mentioned several times before here on the blog, you are able to only make a 1031 exchange on property you hold for business or investment purposes. Properties that are held exclusively for personal use cannot be included as a part of a 1031 swap. Also, the primary residence will not generally be considered as a …
Converting 1031 Exchange Property Into A Primary Residence Read More »
There are consequences. Most real estate owners making a 1031 swap want to put aside an amount from the sale of their surrendered property. Perhapsthey need money to fund their business, tuition costs for their children’s college or even a personal debt. Then, we come to the next question: can you still retain a portion of the sold …
Consequences Of Performing A Partial 1031 Exchange Read More »
In the past couple of months, we’ve written about like-kind exchanges (also called the IRS 1031 swap) as well as the tax benefits associated with one. An exchange of like-kind occurs the case when a taxpayer who has an investment property decides to sell it, using an approved intermediary, and purchase a replacement property within a …
Your spouse and you can delay paying taxes on selling an investment asset by swapping it in exchange for an investment property of another type. This clever investment choice is known as a similar-kind exchange, also known as a 1031 exchange. It permits you to delay paying your tax bill until you have sold your new …
Calculating The Basis Of A The New Property In An Exchange Of 1031 Read More »
One of the frequent questions we receive from those seeking to complete an exchange in 1031 form is if they are able to make an exchange of 1031 funds from their vacation home (relinquished property) into a comparable qualified home (replacement property) in a tax-deferred basis by using the 1031 exchange? In the past there …
1031 Like-Kind Exchanges For Vacation Homes And Second Homes Read More »
Making 1031 Exchange In The Correct Way There are numerous advantages with investing in a property investment property. They range from diversification the creation of equity to the potential for cash flow and tax benefits. Selling an investment property or rental property can be accompanied by the possibility of 4 taxes, which will consume a significant portion …
If you’re one of the many people who invest in real estate, the chances are you’re always evaluating your portfolio of real estate to see if the equity is put to the right direction. That means making the most of the many real estate alternatives to see whether you can pull the equity and put it …
1031 Exchange Vs. Credit Refinance Cash Out: Which Is The Best Option For You? Read More »
The possibility of delaying tax payments within the real estate industry or even within qualified retirement plans, such as IRAs permits the investor to increase their wealth faster which will provide investors with more capital and income in retirement. Although many do not favor investing in real estate and instead prefer bonds, stocks and mutual funds …
With the many tax advantages which come with the 1031 exchange however, there has been significant fraud over the years from investors who have utilized different “related parties” strategies or methods to delay, avoid or even dodge the payment of taxes on income. Over the past 10 years 1031 Exchanges have definitely not been exempt …
1031 Exchange Related Party Rules: What You Need To Be Aware Of Read More »
