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1031 tax exchange and pre construction


Tax Deferred Construction Exchanges

Exchangers sometimes need to acquire property on which they will build improvements or renovations that they wish to include as exchange replacement property. Improvements on land an exchanger has already acquired will not count as replacement property in a 1031 tax exchange. By utilizing an “Improvement or Construction Exchange” it would be possible for an exchanger to receive property in a tax deferred exchange that is renovated, improved to the exchangers specifications. In an “Improvement or Construction Exchange”, proceeds from the relinquished property sale are received and held by Bankers Escrow Corporation as provided by IRS rules. Transfer of the completed replacement property is made within 180 days after the relinquished property sale. Funds from the relinquished property are used to supplement other financing which permits both the purchase and construction of improvements on the replacement property. It is necessary that all improvements and funds be utilized within the 180 day period after the sale of the relinquished property. An improvement or construction exchange can allow an exchanger to both acquire and improve property and save capital gains tax. Bankers Escrow Corporation has accommodated many successful improvement and construction exchanges. Fees are determined upon the complexity of the transaction.  Call an exchange specialist at 800-571-6595 to discuss your construction tax exchange.

Personal Property Tax Exchanges

A business may relocate or have the need to update equipment. Under IRC 1031, personal property sellers now have the alternative of moving their business assets into a more desirable or profitable replacement without equity loss to capital gains tax. Businesses are able to exchange personal property as long as they are within the proper IRS exchange categories. These types of personal property exchanges can be complex depending upon the quantity and type of property involved but the tax savings can be significant. The exchangor's accountant becomes very involved in determining the asset categories prior to the exchange. The staff at Bankers Escrow Corporation works with the exchangor, the broker and the escrow holder/attorney to transfer the ownership of the exchange property.

1031 Exchanges For Multi Use

Combined use properties such as a home office or business, ranch or farm land with a primary residence can utilize a 1031 exchange for the non primary residence portion. With advance planning, the usage of real estate appraisals, market analysis or percent of business use a person can break out the exchange portion from the primary residence and be listed on either the sales contract or separate settlement statements. In addition, a taxpayer can participate in a partial exchange and incur federal and state tax liability on that portion of the property that was not exchanged. Call the experts at Bankers Escrow Corporation at 1.800.571.6595 or 303.986.4848 to brainstorm about these exchanges.

Bankers Escrow Corporation
Corporate Headquarters
44 Union Blvd. Suite 115
Lakewood, CO 80228
request@bankersescrow.com
Phone: 303.986.4848
Phone: 970.453.1446
Fax: 303.986.4761
Toll Free: 1.800.571.6595
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