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Per IRC §1031, a real property exchange is the trading of one property with the intention of placing the profits into a different property and thus deferring capital gains taxes. These transactions allow investors to continue investment in other property without losing investment equity to taxes. |
"No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment."IRC §1031
If you exchange investment property exclusively for like-kind investment property, no gain is recognized by the IRS, making the exchange a desirable option for investors eager to keep all of their real estate profits. Exchanges serve also as a factor in facilitating considerable portfolio growth and better Return on Investment
The replacement property must be identified within 45 days and acquired within 180 days of the sale of the old property. To be eligible for a safe harbor tax deferral, the proceeds need to be held with a Qualified Intermediary between the time of sale and the purchase.
Be sure to check with a financial advisor for tax or legal advice before starting the exchange process with an accommodator. Then simply contact an accommodator finance representative to begin a fully guided and easy exchange process.
Step 1: Exchanging the Property
The investor prepares, organizes, and completes the required documentation for the trading of the relinquished property
Step 2: Obtaining a Replacement Property
IRC §1031 requires that replacement property identification take place within 45 days and generally permits up to three properties to be identified as potential replacements.
Step 3: Purchasing a Replacement Property
The investor purchases the replacement property within 180 days of the sale of the relinquished property. The proceeds from the sale of the relinquished property will then go to the investor’s escrow company, which will then give the deed of the replacement property to the investor once the transaction is completely closed.
There are several types of exchanges: delayed exchanges, reverse exchanges, improvement exchanges and personal property exchanges.
DON'T THROW AWAY YOUR TAX-EXEMPT STATUS
Beginning in 2008, small tax-exempt organizations will have a new filing requirement. It’s short, easy and electronic—it’s the new e-Postcard.
If you are a tax-exempt organization that normally has annual gross receipts of $25,000 or less and does not have to file Form 990 or 990-EZ, you must file the e-Postcard. The e-Postcard is due by the 15th of the fifth month after the close of your tax year. So of your organization operates on a calendar year, the e-Postcard is due by May 15 of the following year.
What happens if you don’t file? You risk losing your tax-exempt status!
ESTATE ORGAINZER
Preparing for the unexpected is always something we know we should do but never but never get around to doing. Due to client requests we have created an Estate Organizer to help you with this vital effort. This publication highlights important estate information and a checklist for you to follow in the creation of vital information your survivors will need, and steps to take in case you become mentally incapacitated or in the event of your death. We recommend you fill out the Estate Organizer, discuss it with your executor, and place it for safekeeping. If you have family members who would benefit from the organizer, encourage them to also complete a copy.
You can download a copy of the Estate Organizer by clicking on the PDF logo below. If you would prefer a paper copy, please contact our office and we will promptly mail you one.
