Steven W.'s Blog

Depreciation Recapture You may be required to "recapture" the depreciation deducted by you on your real estate investment property upon the disposition (sale) of the investment property.  This means that you may have to recapture or add back into your taxable income the amount of depreciation tak...

Is there ever a situation in which the 1031 Exchange is not a good idea?  Yes, absolutely.  1031 Exchanges are not for everyone and may not be appropriate under certain circumstances.  You would generally not want to structure a 1031 Exchange if you have an actual loss on the sale of your real pr...

What is a 1031 Exchange? Section 1031 of the Internal Revenue Code allows you to dispose of certain real or personal property and defer the payment of your federal, and in most cases, state depreciation recapture and capital gain income tax liabilities by exchanging the real or personal property ...

Properties Used in Your Trade or Business You can also acquire and use a property or asset in your trade or business and it will qualify for tax-deferred exchange treatment.  You might acquire a commercial office building (real estate) to operate your business from, or you may acquire a large pie...

Domestic Property versus Foreign PropertyProperty sold in one state may be exchanged for property located in another state, provided they are located with the United States of America.  Only domestic (United States) property can be exchanged for domestic property and non-domestic (foreign) proper...

Personal PropertyIn addition to real property, personal property also qualifies for 1031 exchange treatment if the Qualified Use Property Requirements and Like-Kind Replacement Property Tests are met.  You cannot exchange personal property for real property.  State law generally governs the deter...

Properties Held For Sale (Inventory) Properties or assets acquired and held for sale do not qualify as held for investment or used in a trade or business and will typically not qualify for 1031 exchange treatment.  The acquisition of property for the purposes of fixing it up and then selling it, ...

1031 Exchange Deadlines45 calendar days to identify potential like-kind replacement property.180 calendar days to complete the 1031 exchange.  1031 Exchange Identification Rules 3 Property Rule  Investors may identify up to three (3) potential like-kind replacement properties, without regard to t...

1031 Exchange Reinvestment Requirements Trade Equal or Up In Value  The investor must exchange equal or up in value based on the net sales price and total purchase price so that the total purchase price of your like-kind replacement properties is equal to or greater than the net sales price of yo...

Personal property 1031 Exchange  Personal property can also be exchanged for other personal property of like-kind or like-class.1031 Exchange Qualifications   Qualified Intermediary  You must select your Qualified Intermediary ("QI") and have your QI assigned into your relinquished property (sale...