1031 exchange is the tax-deferred exchange under which the investor can defer the capital gain taxes on the exchange of like-kind properties. The term like-kind here means the properties that are similar in nature. The mandatory criterion for the 1031 replacement properties used under the 1031 exchange is that they must be used for some business or productive use and investment purposes. Not to mention, but the 1031 exchange cannot be done for the primary residence by the investor.
1031 Exchange empowers your money to get the maximum profit for your 1031 exchange properties. However, the exchange process is extremely boggling in nature, and it would be wise to have guidance from 1031 professionals. We have a team of extensive experience in handling the highly profitable exchange of property for our varied client base.
A 1031 exchange may include any properties like office buildings, storage facilities, industrial properties, single-family homes, multi-family apartments, raw lands, retail shopping centers, and triple net leases.
One more point that the investor must keep in mind before doing the 1031 exchange is that the investor must involve qualified intermediaries. If the investor plans to complete his 1031 exchange by himself, he should stop bothering because the chances are negligible. We can say this is a wonder, as a more experienced and qualified person will be handling the exchange.
A Qualified Intermediary, also known as an accommodator, is the expert who is responsible for completing the exchange for 1031 replacement properties. So, the investor cannot complete the exchange by himself as QI is the essence of the 1031 exchange. Generally, the exchange starts with the sale of the relinquished property; for this reason, investors need the assistance of a qualified Intermediary as he holds the sale proceeds as the investors aren’t allowed to touch it. The proceeds from the sale of property are kept in a special account known as an escrow account.
The 45 days deadline is there to identify the replacement property. These 45 days is known as the identification period. If the investor does not meet the deadline and couldn’t complete the exchange within 180 days, then the exchange of property will not qualify as a 1031 exchange. Therefore during the process of 1031, exchange time plays an important role, and the involvement of Qualified Intermediaries becomes more crucial for 1031 replacement properties.
For consultation and assistance regarding the 1031 exchange, call – 888-395-0046 or email us at firstname.lastname@example.org.