A 1031 exchange, also known as a Starker Trust, is used by a real estate investor who wants to sell an investment property he or she owns but does not want to pay any taxes. A 1031 exchange allows the seller of investment property to defer taxes by purchasing another property that costs at least as much as the property he or she is selling. There are very strict rules for using 1031 exchanges, and if you blog the deadlines or rules, the 1031 will not be valid. Typically, you’ll need a third-party company to hold your 1031 funds (you’ll want to choose this company carefully) and a real estate attorney that you hire to protect your interests. This topic page is the nerve center for hundreds of articles and videos about 1031 exchanges. These articles discuss the nuances of selling property tax-free using a 1031 exchange. You can use the topic cloud on the right navigation to further refine your search.
1031 exchange process, timelines and examples. There are a number of ways to successfully complete, or complicate, a 1031 exchange. A few weeks ago, we wrote about like-kind exchanges (also known as an Internal Revenue Code Section 1031 exchange) and the temporary relief being granted to some buyers and sellers during the COVID-19 pandemic. For [...]
1031 exchange deadlines during COVID-19 pandemic. This reader wants to know about extensions available to those who completed a 1031 exchange in 2019. Q: We completed our 1031 exchange in September 2019. Our renter has fallen on hardship due to the Coronavirus/COVID-19 pandemic and cannot afford the rent. Similarly, we are in a rental that [...]
1031 exchange rules and limitations. This reader wants to know if they can use a 1031 exchange to buy a new investment property with other investors. Q: Are there options for a 1031 Exchange where you would be a property owner with other people? For example, if you bought an office building, retail center or [...]
A 1031 exchange allows you to buy and sell investment property within a specified time period and defer paying taxes to the IRS. Primary residences, second homes and vacation homes are generally not eligible for 1031 exchanges. Real estate market conditions may make it harder to sell a property and potentially prevent a successful 1031 exchange. Talk to a 1031 exchange company about doing a reverse exchange instead.
A 1031 exchange allows you to buy and sell investment property including real estate and defer paying taxes to the IRS. Real estate market conditions may make it harder to sell the old property and potentially prevent a successful 1031 exchange. Learn how real estate market conditions can affect a 1031 tax exchange or Starker exchange and why a reverse exchange may be effective in this housing market.
When you own an asset for business or investment use you can claim some depreciation as that asset drops in value. When you later sell that asset the IRS wants to get back, or recapture, some of the depreciation. Our 1031 exchange expert explains how recapture depreciation tax works.
Depending on when you do your 1031 tax exchange you may be able to claim a failed or partially failed 1031 exchange on your taxes. Learn how the timing of a 1031 exchange affects tax straddling. Be sure to discuss the timing of your 1031 tax exchange with your CPA or tax attorney.
When you want to do a 1031 tax exchange you have to find a qualified intermediary, an impartial third party who will hold your funds. But how can you find a trustworthy 1031 exchange company? Ask them how long they've been in business, what insurance they have, what experience the staff has, where your 1031 funds will be held and what to do if the 1031 company goes bankrupt. Don't just rely on recommendations to find a 1031 exchange company.
When you're doing a 1031 tax exchange you have 45 days to identify your replacement property. The replacement property in a 1031 exchange has to be like kind property. So you have 45 days to find another domestic real estate property if the property you plan to sell is in the U.S. also. Learn whether weekends and holidays are included in the 45 day rule for 1031 exchanges.