Additional 1031 exchange considerations

By KATHERINE RIVERA, for 1031southdakota.com 8/17/2007

Real estate or immovable property is a legal term in some jurisdictions that encompasses land along with anything permanently affixed to the land, such as buildings. Timeline: No later than five business days after the EAT acquires its ownership interest in the parked property, the EAT and the Exchanger must enter into a written agreement. This rule enables the family to sell the home to raise cash for the expenses without incurring a large tax bite. You can exchange any Real Estate investment for any other type of Real Estate investment - for example, vacant land can be exchanged for a warehouse, an office building for an apartment complex, or a vacation home, an orange grove, a golf course, horse ranch, whatever. QUALIFIED INTERMEDIARY: The entity who facilitates the exchange, defined as follows: Not a related party (ie agent, attorney, broker, etc), Receives a fee, Receives the relinquished 1031 property from the Exchanger and sells to the buyer, Purchases the replacement 1031 property from the seller and transfers it to the Exchanger who is a Qualified Intermediary.Although there are no asset classes for non-depreciable tangible property and intangible personal property, such as copyrights and franchise agreements, such property may be eligible for tax deferred treatment when exchanged for like kind property, i.e , property of the same nature and character. In fact, the owner of a single-member LLC may dispose of relinquished property, but have the LLC take title to the replacement 1031 properties. Personal property can also be exchanged for other personal property of like-kind or like-class.

What to do

It is a technique for deferring gain on the sale of property by re-investing the proceeds of the sale in like-kind property. Also, personal property used predominantly in the United States and personal property used predominantly outside the United States are not like-kind properties. After years of industry practices of structuring reverse exchanges the IRS on September 15, 2000 issued Revenue Procedure 2000-37. With knowledge and ability, we can competently handle your 1031 tax exchange deal not only to ensure compliance with the IRS regulations, but to also maximize the profitability of your real estate exchange.Probably the biggest benefit is that the taxpayer can take on many of the risks and benefits of ownership while qualifying for the safe harbor.Real properties are generally of like-kind, not considering whether the properties are improved or unimproved.

Points to consider

In this way, the taxpayer does not have access to or control over the funds when the sale of the old property closes. The findings point to a response asymmetry with respect to the level and trend of interest rates. The exchange works the same way for oil and gas as for real estate. The IRS considers real estate and producing oil and/or gas properties as Like Kind. After these initial asymmetric bids, the parties usually met halfway. Due to depletion of the reserves, it is necessary to locate properties with cash flow equal to two-to-three-times the annual cash flow from real estate assets.In a double net lease (Net-Net or NN) the lessee or tenant is responsible for real estate taxes and building insurance. An exception occurs when a reduction in equity cannot be offset by increasing debt. In addition, the value of the format doubles as the share of tax exempt/ deferred investment in REITs increases to 40%, the fraction obtaining in the broader equity market. That is when the deferral may turn into permanent tax savings.

1031 Exchange Info

Tenant In Common

Triple Net Lease

Available 1031 Real Estate

Who we are

Additional 1031 exchange considerations

What to do

Points to consider

Processing Your Request