1031 Exchange Experts is the leader of companies with information on the rules, requirements and guidelines of investment real estate, which are 1031 properties by definition.
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 alex: Is
the 1031 exchange only for investment houses or primary residences
as well? |
 1031
James: Alex, a 1031 exchange is designed for investment
property only. There is a different tax code for primary residences
that allow you to get... read more. |
| Donna:
When you say that you have to invest the cash proceeds from a sale
to qualify for a 1031, do you mean the entire sale amount or the amount
that you gained. What if we had put personal money in it before? |
 1031
Cody: yes, in order to defer all of the gain, you must
reinvest all of the proceeds from the sale into the replacement
property. Even if that includes money you originally put
into the property.
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| Chris:
Can I exchange real estate for a private rail car. Which will be held
as a business to be rented out on rail car trips? |
| 1031
Cody: As described, no. If it moves, it must be like-kind,
ie: railcar for railcar. BUT if it were bolted to the ground and being
used as a building, THEN you could make a good case for exchanging
into it from a restaurant, an apt bldg, a barn, a rental house, etc. |
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TEE-Shots" are short emails
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the 1031 exchange process, new developments, laws
and regulations, and IRS and court rulings that affect
1031 investments.
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| Bare Bones Basics of a 1031 exchange |
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by James Schuler
for 1031 Exchange Experts, LLC |
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People
who have only heard of 1031 exchanges know this much: it
has something to do with real estate. Basically, a 1031 exchange
works like this:
- first, you call a 1031 'qualified intermediary,' (or 'Q.I.').
They start the exchange process for you.
- work with a realtor to sell your old property
- at the closing, the money goes straight from the
closing to your QI. (I explain why below)
- work with a realtor to buy a new property.
- when you finally close on your new property, the QI sends
your money to the closing.
In this way, you buy and sell
real estate without handling any cash. Technically, in the eyes of
the law, you're actually TRADING properties with someone. If you
possess, hold or control the money at any time between the sale of
your old property and the purchase of your new, it becomes taxable
to you. That's why when you sell your old property, the money bypasses
you and goes straight from the closing to the QI. Later, it will
go straight from the QI to the closing of your new property.
Why not just buy and
sell outright?
Because when you sell something, yo.... |
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1031News This
Week |
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05/01/2013 |
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Gary Gorman
Founder, Managing Partner, 1031 Exchange Experts,
LLC |
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A question I commonly get is whether you can rent an exchange property to a relative. Most typically the client wants to buy a replacement property that they can rent to their son or daughter. The answer is yes you can—provided that you strictly follow two basic rules: 1) the rent you charge has to be fair market value for that type of property, and 2) your rental agreement must be in writing and you must enforce the terms of the agreement (most importantly the clause dealing with the late payment of rent).
By far, the most important of the two....
Read
the rest of, "Renting 1031 Exchange Property to a Relative" here....
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050113
TRANSPARENCY: With 1031 Exchange Experts
you can see your funds, online, 24/7. |
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This Week's TEE-Shot |
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04/30/2013 |
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A recent tax court case illustrates what can go wrong when you rent exchange property to a relative. In this case the IRS attempted to disallow the taxpayer’s exchange when he gave his tenant son credit for improvements the son made to the property.
If you have, or are thinking of renting exchange property to a relative, this article will help keep you out of trouble.
...to read the
rest of "Renting 1031 property to a relative" subscribe to Tee-Shots below |
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