You have a question, we have an answer:
What type of property qualifies for a 1031 exchange?
Any property held for productive use in a trade or business or for investment can be exchange for like-kind property. "Like-kind" refers to the nature of the investment. Any type of real property can be exchanged for another type of real property. For example: A single family rental can be exchanged for a duplex. Raw land can be exchanged for a shopping center or an office space for apartments. Any combination will work. This gives the investor flexibility to change investment strategies to fulfill their portfolio needs.
What Does Not Qualify?
A personal residence, developed lots, home flipping, partnership interests or property held for resale immediately after acquisition. Second homes may or may not qualify depending upon the use and how it's reported for income tax purposes.
What kind of exchanges does 1031 pros handle?
We handle all types of exchanges: Delayed Exchanges, Reverse Exchanges and Build to Suit Exchanges. From the simple to the complex, we can handle any type of exchange.
Does 1031 Pros handle exchanges in any state?
Yes. We can handle exchanges for any property in any of the 50 states.
How much notice do I need to do a 1031 Exchange?
You can do a 1031 exchange any time before closing on the sale of your investment property. Like we said before, we're fast.
How long do I need to own my investment property before I can exchange it for another?
There is no set timeline, but to avoid any issues you should at least own it for a minimum of 12 months.
What happens if I don't close on my replacement property within 180 days?
Then you just pay the capital gain taxes like your would have if you were to sell the property in the first place.
Can I sell one property and exchange into multiple properties?
Yes, in most cases you can exchange into three other properties.
Why should I use a qualified 1031 intermediary to do my exchange?
We will prepare all the correct paperwork you will need to file your taxes with. We will also ensure you meet your timelines and any other specifics of the 1031 tax code.
What if my Title company is a qualified 1031 intermediary?
1031 Pros specializes in exchanges and has the expertise, experience and history to ensure an audit free exchange.
What is a reverse exchange?
A reverse exchange is when you close on the purchase of the replacement property before you close on the sale of the relinquished property. Many real estate investors will utilize a reverse exchange to acquire a replacement property in a market where there may be competing offers or there is a need to close fast. Because of our vast experience handling these types of exchanges, we offer very competitive rates and are willing to match any competitor pricing.
What is an improvement exchange?
Also referred to as a construction exchange or build-to-suit exchange, improvement exchanges offer real estate investors nice benefits, which often result in better investment opportunities than properties readily available on the market. The ability to remodel, add capital improvements, or build from the ground up, while using tax-deferred dollars, allows an investor to reinvest in a replacement property that meets their exact investment criteria.
What is the Federation of Exchange Accommodators?
The Federation of Exchange Accommodators (FEA) is the only national trade association organized to represent professionals who conduct like-kind exchanges under Internal Revenue Code §1031. Members include Qualified Intermediaries (QIs), their primary tax and legal counsel, and affiliated industries (TIC sponsors, banks, real estate brokers, title companies, settlement/escrow agents, etc.). 1031 Pros is a proud member of the FEA.
Can I 1031 exchange into a Tenancy in Common or Triple Net Lease Property?
Yes, you can exchange into a Tenant In Common (TIC) or Triple Net Lease real estate investments. The biggest rule of thumb is that your name is on the title as an owner with a percentage of ownership. These types of real estate investments offer a great passive income for those who are done with being a landlord and are ready to sit back and collect a monthly check. We do not offer these types of investments at 1031 Pros, but we have some great partners who do. Call us today to learn more.
Does my personal residence qualify for a 1031 exchange?
No, it does not. Personal residences qualify for different tax benefits under IRS Code Section 121. Section 121 allows a taxpayer to exclude up to $250,000 ($500,000 for certain taxpayers who file a joint return) of the gain from the sale (or exchange) of property owned and used as a principal residence for at least two of the five years before the sale. 1031 Pros does not offer any services or tax advice for personal residences. Please contact our trusted Accounting partners under the "More Tab" for more information on Section 121. Tell them 1031 Pros sent you!