What are the "nuts and bolts" of a 1031 exchange? How does a 1031 Exchange work exactly? Are there certain guidelines I need to follow to complete my 1031 Exchange? Are there any time restrictions for completing a 1031 Exchange? What are the requirements for replacement properties? How do I know which replacement property option is best for me? Which companies have the best replacement properties? Is a Tenant-in-Common property a good fit for me? Why should I consider an Oil & Gas property? What are the benefits of exchanging rather than just paying the taxes? Do I have to be in a 1031 Exchange in order to invest? What do you charge for your services?	What are the "nuts and bolts" of a 1031 exchange? In an ordinary sales transaction, the property seller is taxed on any gain realized by the sale of the asset. By utilizing a 1031 exchange, the tax on the transaction is deferred until such time that the investor elects to sell and pay the taxes rather than do another exchange. The basics of a 1031 exchange are as follows: First, it is recommended that the sales contract specify that the seller intends to do a 1031 exchange. The seller must not receive any funds, including earnest money, from the sale. Funds from the sale must instead be held by an unrelated party called a "qualified intermediary" (QI) or "accommodator" until replacement property is identified and purchased. Two "clocks" start ticking upon close of the relinquished property. The first is a 45-day identification period during which the seller must find and identify to their intermediary the property they intend to purchase with their exchange funds. The second is a concurrent 180-day period during which they must close on one or more of the identified properties. To completely defer taxes, the replacement property price must be equal to or greater than the sum of the net equity and any debt that was paid off upon sale of the relinquished property. It is possible to keep some of the cash and still exchange the remaining balance. Applicable capital gains taxes would then be due only on the retained cash. If you would like to go beyond these basics, we can help you. We also know and have worked with many excellent and proven intermediaries across the country. If you would like us to suggest some names, just ask! We would be happy to answer any questions you may have. Feel free to contact us today! 866.347.1031 toll-free
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