Time Limit For 1031 Exchange
REM # A634
By Ilyce R. Glink
Summary: A reader has closed on the sale of a rental property and would like take advantage of the 1031 tax free exchange. Ilyce explains that you have 45 days to designate the property that is to be exchanged.
Q: It has been one week since we closed on the sale of our rental property.
We want to purchase another investment property to avoid paying capital gains.
Is it too late for us since the money has already been given to us by the escrow company?
A: When you do a 1031 tax free exchange, also known as a Starker Trust, you
typically have 45 days on either side of the closing to designate the property
that you will exchange. The problem you have is that you and your spouse (or
partner) were given the funds personally.
You should have directed the funds go into an escrow account and hired a third-party
company to help you facilitate the transaction.
There are many rules that have to be followed with a 1031 tax free exchange.
Once you break one, it’s hard to go back. For more details, please consult
with a real estate attorney who frequently does 1031 tax-free exchanges.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
Property Prices
Capital Gains Tax Question
1031 Exchanges to Avoid Capital Gains Taxes
Limiting Taxes When Selling Property
Use 1031 Exchange To Avoid Capital Gains Tax
Link to This Article
Like what you've read? Spread the word! You can link to this article
from your website by copying the following code and adding it to
a page on your website:
Copyright ©2001-2007. ThinkGlink, Inc.
All rights reserved. Reproduction of material from any www.ThinkGlink.com pages without permission is strictly prohibited.
Site designed by Walker Sands Communications
