TEE-Shots Newsletter

Frequently we get calls from people who want to do a “1031 TIC.” Or maybe even a “TIC 1031.” And if you could combine two words any more ways, we’d probably get requests for those as well.

Occasionally we get a call from a prospective client who, for one reason or another, does not qualify for a 1031 exchange. Maybe they're a developer, or they want to 1031 exchange their primary residence, or maybe a fix-n-flip.

When we tell them they do not qualify, sometimes (albeit rarely) we get the response, “Let’s just go ahead with it anyway. Chances are I won’t get audited. I know the risks, and I'm willing to roll the dice.”

This is The 1031 Exchange Experts’ 100th Tee-Shot! And to celebrate, we have just released a brand new tool for Realtors® and investors. The CD-Rom is called, 'The Real Estate Investor’s ToolBox™' and is useful in many ways. Many investors are learning more about real estate, and professionals are passing it onto others with their business cards inserted. The ToolBox CD is a compliment to the ‘Cool Tools’ CD released earlier this year.

Can I use my IRA along with my 1031 proceeds to buy my replacement property...?

Yes you can, but it has to be done just right, and there are some limitations on how you use your property. Any property purchased by your IRA must be used for investment purposes only--so your replacement property cannot be a vacation home for you to use personally and it cannot become your personal residence in the future. In fact you cannot rent your property out to any disqualified person, which is your business or any immediate family member except siblings.

Who Tracks My Deadlines...?

Three principles from a real estate investment company interviewed their local Qualified Intermediary, who was with a prominent title company, about handling their 1031 exchanges. While the QI was showing them his file drawer of clients, he mumbled, “Hmm. Gotta clean this out. This one’s dead… this one’s dead… this one’s expired…” and so on. One by one, he pitched folders in the trash. True story! Names changed to protect the guilty.

How InvestorLoft.com has streamlined the real estate investing process

Free webinar reveals how to maximize this new digital tool

1031 investors searching for replacement 1031 real estate have a new tool in their arsenal: highly customized and relevant real estate web searches and alerts.

Agent-Friendly Replacement Property Resource Is 1031-Friendly Too!

1031Tee-Shots Subscribers Get In Free.

A progressive real estate investment listing service with a special focus on the residential 1031 exchanger, Investorloft.com provides real value to both investors and real estate agents. It is the first “Agent-Friendly” resource of its kind.

Section 1031 specifically does NOT allow the acquisition of a partnership interest as the replacement property for a 1031 exchange. However, in a just-released private letter ruling, the IRS did allow a taxpayer to purchase a partnership as the replacement property. Private letter rulings technically apply only to a specific taxpayer, but in some cases, such as this one, they provide a great deal of guidance on how to structure a similar transaction.

The IRS just released a ruling setting forth the guidelines for doing a 1031 exchange on a vacation home. The ruling is a Revenue Procedure (2008-16), which is what I call a ‘cookbook ruling,’ which essentially means that if you do certain things, you get a guaranteed result. In this case they will NOT challenge the investment nature or exchangeability of your property.

Last week my wife was in a little fender-bender here in Denver (no one hurt and no damage to her car, thank God). In the process of exchanging information, the driver of the other car recognized her!

It turns out he’s been receiving 1031Tee-Shots regularly for the last three years. It also turns out that he is currently in the middle of a 1031 exchange with one of his own properties but is using another intermediary: someone he doesn’t know, located in another city.