Here are a few key help videos which will explain a few of the issues regarding your tax deferred exchange with which you need to be familiar. A number of addititional videos are available at our video library here.
Over the years the rules associated with completing a compliant exchage have been dramatically streamlined for your convenience. Learn the key guidelines and timing restraints which remain.
The Internal Revenue Service requires that all properties involved in a 1031 exchage need to be 'like-kind' properties. Learn the two categories of properties that th IRS has deemed suitable for your exchange.
Equity and capital gain are two separate and distinct items. Your equity reflects the value of the unencumbered ownership of your property. To determine your gain, identify your original purchase price, deduct any depreciation, which has been previously reported, then add the value of any improvements, which have been made to the property. The resulting figure will reflect your cost or tax basis. Your gain is then calculated by subtracting the cost basis from the net sales price.
When tax deferred exchanging is most commonly discussed, it is usually the deferred or delayed exchange process to which is being referred. This is the exchange type in which you sell an appreciated property, identify new replacement property within 45 days, and subsequently acquire the replacement property within a 180 day exchange window.
Often, through no fault of their own, an Exchanger is foreced into a situation in which they must buy before they sell. This is a process known as a reverse exchange. Learn how the reverse process is completed pursuant to IRS Revenue Proedure 2000-37 and how many Exchangers prefer the reverse exchange because it eliminates the normal headaches associated with the 45 day identification.
It is entirely possible to build new improvements or totally construct your replacement property and still include it within your 1031 exchange. However, the IRS sets forth several key processes to ensure that all the new improvements count towards your overall purchase and you are never at risk of 'exchanging into property you already own'. Learn about the entire process with this video.
The IRS requires that you identify candidate or prospective replacement properties whithin 45 days of your sale. Learn the ID rules with this video. The Three Property Rule allows you to identify up to three properties of any value, and the Two Hundred Percent Rule dictates that if four or more properties are identified, the aggregate market value of all properties may not exceed 200% of the value of the Relinquished Property.
We believe that having 24/7 access to your exchange documents, the 1031 funds in your trust account, and the ability to securely communicate with your Intermediary is critical. This is why we encourage our Exchangers to utilize our 1031 Exchange Center where they can track every aspect of their 1031 and communicate with their 1031 Coordinator through our encrypted messaging application.
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