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Tag Archives: 1031

Will it jeopardize my 1031 Exchange if intent-to-buy papers before my property is sold?

Thursday, February 3, 2011

Intent to buy papers are usually not a binding contract which means you can sign them without fear of penalty. You may even decide to make an Earnest Money Deposit just make sure to instruct the closing company to refund you the Earnest Money and NOT to include it in your 1031 Exchange Proceeds. Many [...]

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Can I 1031 exchange the water rights to my property?

Sunday, January 30, 2011

Depends on many factors. The best place to start is to review our 1031 Exchange Knowledge Base regarding Water rights and 1031 Exchange. Here is an excerpt: “Donald, Gary, and Deborah Wiechen were partners in a partnership, Wiechens Properties Limited Partnership, that owned land in an irrigation district. The partnership obtained the right to receive Colorado [...]

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In a 1031 Exchange, if I take back cash as boot, is this considered income?

Friday, January 28, 2011

In a 1031 Exchange, any cash taken back from your sales proceeds is considered boot. The IRS wants you to re-invest these proceeds in your replacement property but since you are taking control over these proceeds, you are expected to pay taxes on them as capital gains and/or regular income. So the answer to this [...]

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Why can’t a 1031 Exchange Qualified Intermediary pay the Exchanger directly?

Thursday, January 27, 2011

A very good question. Thank you. One of the most important aspects of the IRS 1031 Exchange is avoiding Constructive Receipt.  The IRS signifies that in order to reap the benefits of a 1031 Exchange you must not be in direct control of the 1031 Exchange proceeds at any time during the 1031 Exchange period. [...]

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The buyer of my 1031 Exchange property wants to pay me in regular installments. Can I do this?

Wednesday, January 26, 2011

We have a complete section devoted to 1031 Exchange and Installment notes in our 1031 Exchange Knowledge Base, just click here. Both 1031 exchange and installment rules apply. First, 1031 will limit the recognized gain to the fair market value of the net boot received. (This is a mandatory rule—not elective.) After the recognized gain [...]

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I want to 1031 Exchange a 4-plex but I live in one of the units. How does that work?

Monday, January 24, 2011

What we are talking about here that you want to 1031 Exchange a property that has a mixed classification. The 4-plex qualifies for IRS 1031 Exchange because it is considered a property held for business. The single unit that you live in is classified as your primary residence, which does not qualify for 1031 Exchange. [...]

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We’d like to 1031 Exchange into a purchase for an apartment building. Does the equipment, such as laundry machines, count?

Tuesday, January 4, 2011

In a 1031 Exchange, property incidental to a larger item of property is not treated as property that is separate from the larger item of property. Property is incidental to a larger item of property if in standard commercial transactions, the property is: typically transferred together with the larger item of property. the aggregate fair [...]

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