PRTODAY / NewswireToday Free press release distribution service network

Written by / Agency / Source: Exchange Equity, LLC

Check Ads Availability|e-mail Article


Are you the owner of this article?, Turn it PREMIUM with your LOGO instead - and make it 3rd party Ads-Free! within the next hour!

1031 Exchange - How to Handle Alternative or Multiple Properties - Most real estate professionals know that capital gains taxes can be deferred with an exchange of property meeting the requirements of Internal Revenue Code §1031, but not all understand how an exchange differs from a sale.
1031 Exchange - How to Handle Alternative or Multiple Properties

 

NewswireToday - /newswire/ - New Orleans, LA, United States, 2006/05/02 - Most real estate professionals know that capital gains taxes can be deferred with an exchange of property meeting the requirements of Internal Revenue Code §1031, but not all understand how an exchange differs from a sale..

   
 
Your Banner Ad Here instead - Showing along with ALL Articles covering Real Estate/Property Management Announcements

Replace these Affiliate Programs at ANYTIME! Your banner here within the next hour. Learn How!


 

An exchange requires a transfer of property for another property, where a sale of property is a transfer of property for money.

The primary advantage with an exchange is to:

1) defer the capital gains tax, even though there has been a reduction in the capital gains tax rates, the benefits of a §1031 exchange can be very substantial; and,
2) to fully use your built up equity for acquisition of another property, hopefully of investment grade.

The rules of §1031 can trap the unwary and can result in a loss of some or all of the tax-deferral benefits. The use of legal, real estate and tax advisers familiar with the rules of a §1031 is strongly recommended. As you transact exchanges involving multiple properties, there are other rules that can apply, including, but not limited to, incidental property, single or multiple exchanges, and the same-taxpayer requirement.

Generally, when you exchange one property, you must identify the potential replacement property within 45 days from transfer of the relinquished property and acquire it within 180 days from the same transfer date, unless the transfer occurs later in the year, when the 180-day period can be shortened by the due date of your tax return. if you transfer multiple relinquished properties that close on different dates through one exchange, the identification and exchange periods begin on the date of transfer for the first relinquished property.

Mutiple Property
It may be challenging to use one exchange for multiple relinquished properties closing on different dates. If the closing date for one or more of the properties is delayed or cancelled, acquisition of the replacement property may be affected. It might be better to structure each closing as a separate exchange and to gain some flexibility in identifying and closing on replacement property However, assuming that the apartment buildings are exchanged using one escrow closing to a single buyer under one contract, the IRS could argue that all of the closings are considered one exchange, which could result in violation of the identification rules.

While there are no clear rules on what is a single and what is a multiple exchange, there are a number of factors to consider:

• Is there a single agreement or are there separate agreements for sale of the relinquished properties?
• Is one escrow or title company handling the closings?
• Is there one qualified intermediary or are there different qualified intermediaries being used for the exchanges?
• Are the properties being closed on different dates?
• Are the relinquished properties contiguous or operated as a single property?

If separate exchanges are used, it is important to retain legal/tax advisors and make sure that each relinquished property closing is a separate and distinct from the other closings.

Same taxpayer requirement
While it would seem obvious, the same taxpayer that transfers the relinquished property needs to acquire the replacement property. There are circumstances when the type of entity owning the relinquished property will be different in name from the one acquiring the replacement property. For example, the replacement property lender may require that the owner be a bankruptcy remote entity. In most states, a single-member limited liability company (LLC) is permitted. The federal tax laws permit an LLC to elect to he taxed as a disregarded entity, an association or as a sole proprietorship. If the election is made to be a sole proprietorship, the entity is considered disregarded for tax purposes. The IRS has approved the use of a single-member LLC for acquisition of replacement property. This is commonly used in the structuring of Tenants–In-Common (TIC) or Private Annuity Trust transactions.

If you are considering a §1031 exchange of any kind or the purchase of a Tenant In Common interest, be sure to seek the advice of legal counsel and/or other tax advisors on your specific circumstances. Without adequate knowledge, you could end up paying all or part of the capital gains taxes you are trying to defer.

 
 
Your Banner Ad Here instead - Showing along with ALL Articles covering Real Estate/Property Management Announcements

Replace these Affiliate Programs at ANYTIME! Your banner here within the next hour. Learn How!


 

Written by / Agency / Source: Exchange Equity, LLC

 
 

Availability: All Regions (Including Int'l)

 

Traffic Booster: [/] Quick Newswire Today Visibility Checker

 

Distribution / Indexing: [+]

 
 
# # #
 
 
  Your Banner Ad showing on ALL
Real Estate/Property Management articles,
CATCH Visitors via Your Competitors Announcements!


1031 Exchange - How to Handle Alternative or Multiple Properties

Company website links NOT available to basic submissions
It is OK to republish and/or LINK any newswire for any legitimate media purpose as long as you name Newswire Today and LINK as the source.
 
  Is this your article?
Activate ALL web links and social stream by Upgrading to Press Release PREMIUM Plan Now!

|
Publisher Contact: James P. McNamara - ExchangeEquity.com 
504-897-1299 jamesp[.]exchangeequity.com
 
Newswire Today - PRZOOM / PRTODAY disclaims any content contained in this article. If you need/wish to contact the company who published the current release, you will need to contact them - NOT us. Issuers of articles are solely responsible for the accuracy of their content. Our complete disclaimer appears here.
IMPORTANT INFORMATION: Issuance, publication or distribution of this press release in certain jurisdictions could be subject to restrictions. The recipient of this press release is responsible for using this press release and the information herein in accordance with the applicable rules and regulations in the particular jurisdiction. This press release does not constitute an offer or an offering to acquire or subscribe for any Exchange Equity, LLC securities in any jurisdiction including any other companies listed or named in this release.

Real Estate/Property Management via RSSAdd NewswireToday - PRZOOM Headline News to FeedBurner
Find who RetweetFollow @NewswireTODAY



Are you the owner of this article?, Turn it PREMIUM with your LOGO instead - and make it 3rd party Ads-Free! within the next hour!


Read Latest Articles From Exchange Equity, LLC / Company Profile


Read Real Estate/Property Management Most Recent Related Newswires:

Ede Costa Team Joins Berkshire Hathaway HomeServices California Properties
Berkshire Hathaway HomeServices California Properties Opens New Office in Brea
Berkshire Hathaway HomeServices Nevada Properties Opens New Southwest Las Vegas Office
Berkshire Hathaway HomeServices Nevada Properties Appoints New Las Vegas Branch Manager
Homenova, Inc. Launches A Website for Private Home Sales
Real Estate Executives Appointed to GLVAR Board in Nevada
Westcorp CFO Named Top Tech Exec in Nevada
Berkshire Hathaway HomeServices Arizona Names New Manager
Berkshire Hathaway HomeServices California Properties Names Larry Tait Yorba Linda Branch Manager
Progressive Realtors Launches New Website to Connect Home Buyers & Sellers
Americana Holdings Forms Alliance with ListHub Global in Three States
Manhattan Boutique Real Estate Joins South China’s Leading Luxury Property Show
17th Annual Kansas City Pagan Pride Day - Harvest Festival and Craft Faire on September 13th
Celebrity Staging Expert Announces Ask The Stagers Platform
Berkshire Hathaway HomeServices Arizona Properties Welcomes Hamlet Terry Team

Boost Your Social Network
& Crowdfunding Campaigns


LIFETIME SOCIAL MEDIA WALL
NewswireToday Celebrates 10 Years in Business


PREMIUM Members


Visit  JobsWare.com

Visit  BizJobs.com





 
  ©2016 Newswire Today — Limelon Advertising, Co.
Home | About | Advertise/Pricing | Contact | Investors | Privacy/TOS | Sitemap | FRANCAIS
newswire, PR free press releases distribution service magazines engine news alert newsroom press room breaking news public relations articles company news alerts newswiredistribution ezine bizentrepreneur biznewstoday digital business report market search pr firms agencies reports distri-bution today investor relation successful internet entrepreneurs newswire distribution prtoday.com freenewswiredistribution asianewstoday bizwiretoday USA pr UK today - NOT affiliated with PRNewswire as we declined their partnership offer in 2013
 
PRTODAY & NewswireTODAY are NOT affiliated with USA TODAY (usatoday.com)