Can You Do a 1031 Exchange On Jointly Owned Property?

Divesting jointly owned real estate can create complicated ownership issues and tax liabilities, especially if one co-owner wants to do a 1031 exchange to defer capital gains taxes and others want to cash out of their real property holdings.

How To Record A 1031 Exchange

Recording a 1031 exchange properly is crucial. This involves filling out IRS Form 8824 and submitting it with your federal income tax return. Each individual 1031 exchange you undertake within a tax year requires a separate Form 8824 to be accurately recorded. This form provides a detailed account of both the relinquished and acquired properties involved in the transaction. By diligently recording this information, you ensure the IRS knows the capital gains deferred through your 1031 exchange.

Can One Member Of An LLC Do A 1031 Exchange?

In the world of business ownership and property investments, there are several different structures and tools that you can use. For instance, you can own a business as a sole proprietor, you can have co-owners, and you can all be in business together as an LLC. In an LLC, you and the people you own the business with have a legal separation of your personal finances and the business’s finances. This ensures that you are not at risk of personal financial ruin if the business doesn’t work out as you planned.

Can You Use Money From a 1031 Exchange To Pay Off a Mortgage?

Real estate investors can defer capital gains on the sale of an investment property by purchasing a replacement asset as part of a 1031 exchange.

You Can Do a 1031 Exchange on a Primary Residence—Here's How

“Can you use a 1031 exchange for your primary residence?" is a common query among homeowners. However, the simple answer, according to IRS guidelines, is 'no.' A primary residence does not meet the 'held for productive use in a trade or business or for investment' requirement stipulated by IRC Section 1031. This requirement forms the foundation of a tax-deferred exchange. 1031 exchanges are used primarily to defer capital gains taxes on investment properties. Yet, it's worth noting that certain exceptions exist within the Internal Revenue Code, adding layers of complexity to this seemingly straightforward ruling.

Can A 1031 Exchange Be Used For New Construction?

A 1031 tax-deferment can be used on many types of investment property exchanges. However, can an investor use a 1031 Exchange for an upcoming construction project?

How Do You Calculate Basis for a 1031 Exchange?

When discussing 1031 exchanges, the concept of 'basis' becomes crucial. But what does it mean in the context of a 1031 exchange? Essentially, the basis of the replacement property acquired in a 1031 exchange is the same as the basis of the relinquished property, subject to certain adjustments. This basis carries over from your old property to your new one, effectively preserving the deferred gain for potential recognition in the future. It's this ability to defer capital gains taxes through basis transfer that makes 1031 exchanges such a powerful tool for real estate investors.

When A 1031 Exchange Is Not Always The Right Choice

Here at Realized, we help investors defer their capital gains and depreciation recapture liabilities from the sale of an investment property/properties. This is done through a tax code provision known as a1031 exchange and here at Realized, this is typically accomplished via investment in one or more 1031 exchange-qualifiedDelaware Statutory Trust (DST) offerings.

How to Know if You Qualify for a 1031 Exchange

So you’ve done your research and made your decision: you want to take advantage of a 1031 exchange to defer taxes related to your real estate investment. So how exactly do you qualify for this tax strategy?

The Top 10 Things You Should Know About 1031 Exchanges

Internal Revenue Code §1031 provides real-estate investors with a powerful tool known as a “1031 exchange.” What does it do exactly? It allows investors to hold on to gains they’ve made from their real-estate investments without having to pay taxes on the gains. That’s pretty sweet.

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