Three Most Common Ways Investors Blow Their 1031 Exchange

Investors Can Inadvertently Disqualify Themselves.

Blowing A 1031 Exchange

Three Most Common Ways Investors Blow Their 1031 Exchange A 1031 exchange, also known as a like-kind exchange, is a tax-deferred transaction allowed under Section 1031 of the Internal Revenue Code. 1031 exchanges provide a powerful tax strategy for investors to reinvest proceeds from the sale of real estate into new properties without immediate tax consequences. 1031 Exchanges are common…

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Qualified Intermediaries and Their Role in the 1031 Exchange Process

Qualified Intermediaries are independent third parties acting on behalf of the exchanger.

A bridge figuratively represents qualified intermediaries

Article Updated July 25, 2024 The IRS requires that money generated from the sale of the relinquished property must be held by a qualified intermediary until the replacement property is purchased.  If the investor touches or in any way controls funds used for a 1031 exchange, the exchange will be disallowed by the IRS and tax on the capital gains…

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1031 Exchanges and Five Common Misconceptions

There remain deep-rooted misconceptions about Section 1031 of the Internal Revenue Code.

1031 Exchanges Common Misconceptions

A 1031 Exchange, also known as a tax-deferred exchange, is a common, fairly straight forward strategy that affords significant tax advantages to commercial property owners. Thanks to IRC § 1031, real estate investors may sell or relinquish certain qualified property, reinvest proceeds from that property and acquire a replacement property, pursuant to certain time limitations and other regulations. To put…

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Reverse 1031 Exchange Explained

Reverse 1031 exchanges can be quite complex. We will explain the process.

The Reverse 1031 Exchange Explained

Reverse 1031 Exchange – Here is How it Works By following the rules and guidelines in Section 1031 of the Internal Revenue Code, real estate investors and business owners can defer paying capital gains tax by selling real estate property and replacing it with another like-kind property. 1031 tax deferred exchanges generally fall into three categories: delayed, reverse, and build-to-suit….

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1031 Exchange Rules

There are several general rules that apply to all 1031 exchanges:

1031 Exchange Rules

The 1031 like-kind tax deferred exchange originates from Section 1031 of the U.S. Internal Revenue Code. This section of the IRS Code allows real estate investors to defer the payment of capital gains tax that would normally be due when real estate is sold (or relinquished) by purchasing another like-kind replacement property. 1031 exchanges are also known as Starker Exchanges,…

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