Two Tax Benefits on the Sale of One: Split Treatment of Residential Properties
A common question asked by our clients is whether they can do §1031 Exchange when they sell their primary residence. The off-the-cuff answer is “no”. Internal Revenue Code §1031 only applies to properties that are “held for productive use in a trade or business...
Reverse Exchanges: Parking Relinquished Property is Possible but Adds Complexity
Taxpayers can use a Reverse Exchange to avoid the biggest issue they may face in a §1031 Exchange; namely finding suitable Replacement Property in the short 45-day Identification Period after Closing on the sale of the Relinquished Property. By allowing a...
For Tax Subtraction, Buy a Fraction? Delaware Statutory Trusts for §1031 Exchange Replacement Property
One of the most difficult issues our clients face when they are involved in a §1031 Exchange is finding suitable Replacement Property within the tight 45-day identification period. We hear about cap rate compression from nearly every investor. Then, when they find a property, they still need to negotiate an acceptable price and complete their due diligence. That’s a big “to-do” list in such a short time period. And, if the property they identify doesn’t work out, they are out of luck. One possible solution for taxpayers in such a bind is the Delaware Statutory Trust (“DST”)… an Investment Trust or Land Trust that is usually formed under Delaware state law. Here’s the scoop on the pros and cons of DSTs.
2020 Vision: 1031 Exchange Planning for the New Year
With the advent of the New Year, it’s time for taxpayers to begin the dreaded annual ritual of gathering their tax related documents for the journey to the accountant’s office. This is particularly true for taxpayers involved in a 1031 Exchange, but for them it’s not just gathering paperwork. Depending on the status of their Exchange, the New Year may present some deadlines to meet and some opportunities to explore. Here’s what you need to know.
Get Away from Paying Capital Gains Taxes on Your Vacation Getaway with a 1031 Exchange
With Labor Day right around the corner, long, lazy summer days are almost over. In many parts of the country and at some colleges, kids are already back in school, and elsewhere they are dreading the imminent return of homework and school buses. It may be...