1031 News

Section 1031: Vital to Pro-Growth Tax Reform

As Congress considers tax reform and potential areas of revision to the U.S. tax code, a section of the code that ought to be preserved is Section 1031,

Is Your 1031 Exchange Straddling Two Tax Years?

Most users of Section 1031 understand the 180-calendar day deadline to complete their like-kind exchange.  This general understanding of the exchange period deadline is fine for most transactions, but many exchangers remain unaware of the more nuanced definition of this critical period.

Those Tricky 45 Day Identification Rules

BY: MARY LOU SCHWAB CPA, CES
March 2016

          1031 Exchange IRS regulations require that replacement property acquired in a 1031 Exchange be properly identified during the first 45 calendar days after an exchanger sells their old relinquished property.  The identification must be unambiguous, in writing, signed by the taxpayer, and delivered by the deadline to the taxpayer’s Qualified Intermediary or to another “non-disqualified party,” having the responsibility to deliver the Replacement Property to the exchanger.   

What are Valid 1031 Exchange Selling Expenses?

BY: MARY LOU SCHWAB CPA, CES
August 2016

When selling or purchasing an investment property in a 1031 exchange, certain selling expenses paid out of the sales or 1031 exchange proceeds    will result in a taxable event for the exchanger.  Routine selling expenses such as broker commissions or title closing fees will not create a tax liability.  Operating expenses paid at closing from 1031 proceeds will create a tax liability for the exchanger. 

Section 1031 Under Siege In Washingon

BY: MARY LOU SCHWAB CPA, CES
April 2015

          Our government in Washington DC is targeting legislation for the elimination or partial repeal of Section 1031 Tax Deferred Exchanges.  In the Congress, The Way & Means Committee Chairman Paul Ryan is expected to release a draft proposal for tax reform prior to the August 2015 Congressional recess.   

How To Save A Multiple Property 1031 Exchange!

BY: MARY LOU SCHWAB CPA, CES
April 2014

Often an investor selling multiple old properties and exchanging into a new property has an exchange timing issue when one property sale falls through due to inspections or mortgage loan issues.  When an investor has begun a 1031 exchange transaction by selling their first old property and their second old property sale falls through right before the purchase date of their replacement property, a major dilemma is created.  There is a solution that an investor could utilize to save the exchange transaction and gain an additional 180 days to complete the sale of the old relinquished property. The solution is to set up a Reverse Exchange within a regular simple deferred exchange transaction.

California "Clawback" Provision effective January 2014

BY: MARY LOU SCHWAB CPA, CES
January 2014

The State of California, effective January 1, 2014, requires investors who sell their California real estate in a 1031 Exchange transaction and purchase a replacement property outside of California to file an annual information return with the California Franchise Tax Board.

1031 Exchange 120 Day Extensions for Colorado Floods

BY: MARY LOU SCHWAB CPA, CES

September 2013

The IRS announced on September 16, 2013, Updated October 28, 2013, tax relief for Adams, Arapahoe, Boulder, Clear Creek, El Paso, Fremont, Jefferson,  Larimer, Logan, Morgan and Weld counties in Colorado due to severe storms, including flooding and landslides.  Providing that a 1031 Exchange or Reverse 1031 Exchange closed on or before September 11, 2013, residents of the affected counties may have their identification deadline and/or their purchase deadline extended for an additional 120 days. 

 

Reverse Exchange - Allows 180 days to sell your old property

BY: MARY LOU SCHWAB CPA, CES
May 2013

A Reverse Exchange may be the best alternative to save a 1031 tax deferred exchange transaction when a taxpayer needs to purchase their replacement property prior to the sale of their relinquished propertyThe mechanics of a reverse exchange may seem complicated but with proper planning a taxpayer can save money by deferring capital gains taxes and the Medicare 3.8% tax.

Real Estate Tax Strategies after the Fiscal Cliff Legislation

BY: MARY LOU SCHWAB CPA, CES
January 2013

Individuals selling real estate in 2013 with high appreciation will be in for a surprise with the American Taxpayer Relief Act of 2012 - the fiscal cliff legislation passed on Jan. 1, 2013.  Specifically, the long term capital gains tax rate increased to 20% in 2013, and the new Medicare 3.8% tax will come into play for 2013 real estate profits.  

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