Seven 1031 Exchange Tips
Posted by Andy Gustafson on Tue, May 25, 2010
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1031 exchange can be overwhelming for the first time Exchangor. Step back, organize your questions and talk with a Certified Exchange Specialist®.
Here are seven basic 1031 exchange requirements.
1. To defer 100% of the federal and state capital gain and recaptured depreciation, the replacement property must be greater than or equal to the old or relinquished property.
- a. Net equity + debt relieved - selling expenses = price of replacement property.
2. If real estate is being sold, then any type of real estate can be purchased. If personal property is being sold, then the same class or like-kind must be replaced.
3. 1031 exchanges must be set up before or in combination with the first closing. Once a check has been received by the Taxpayer it is too late.
4. The name of the taxpayer on the deed is the name of the taxpayer that is on the replacement property deed.
- a. An exception is a single member limited liability company where the member is selling or buying.
5. U.S. property can be exchanged for property anywhere in the U.S.
6. Foreign property can be exchanged for foreign property in any country.
7. The total time to complete an exchange is 180 calendar days.
To learn more about the ten reasons to exchange.
