Have you been made aware of the possible Changes in 1031 Exchanges?

 

Reform discussions are underway and one of the big ticket items being talked about are 1031 Exchanges. If you are not familiar with these, Section 1031 of the Federal Tax code allows a seller to reinvest proceeds from a sale into the purchase of another property, potentially avoiding Capital Gains tax on their sale. Most commonly, this requires the seller (Investor) to purchase a property with greater value than the property sold; reinvest all of the equity in another property and obtain greater or at least equal debt on the new property. “Section 1031” is slowly making its way into daily conversations and investors should be aware.

 

A few things to know about 1031 exchanges courtesy of Forbes.

Special rules apply when depreciable property is exchanged in a 1031. A few of them are stated below from their article of 10 things you should know about 1031 Exchanges.

  • A 1031 isn’t for personal use, but some personal property qualifies.
  • Like Kind is broad. Most exchanges must merely be of “Like Kind”
  • You can do a “delayed exchange
  • You must designate replacement property  Another great resource as well:Have you been made aware of the possible Changes in 1031 Exchanges? 

    Reform discussions are underway and one of the big ticket items being talked about are 1031 Exchanges. If you are not familiar with these, Section 1031 of the Federal Tax code allows a seller to reinvest proceeds from a sale into the purchase of another property, potentially avoiding Capital Gains tax on their sale. Most commonly, this requires the seller (Investor) to purchase a property with greater value than the property sold ~~reinvest all of the equity in another property and obtain greater or at least equal debt on the new property. “Section 1031” is slowly making its way into daily conversations and investors should be aware.

     

    A few things to know about 1031 exchanges courtesy of Forbes.

    Special rules apply when depreciable property is exchanged in a 1031.

    • A 1031 isn’t for personal use, but some personal property qualifies.
    • Like Kind is broad. Most exchanges must merely be of “Like Kind”
    • You can do a “delayed exchange
    • You must designate replacement property

    For more details and a better understanding of 1031 Exchanges, Read full article at Forbes