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Rainmaker
843,471
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Speak with a qualified 1031 intermediary. Every situation is different.

Oct 18, 2016 11:01 PM
Ambassador
4,391,712
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

I assume you are talking about a 1031 exchange. If it ISN'T a like kind exchange, per the IRS rules, you could get hit with some pretty hefty taxes. I'd consult with a 1031 exchange company to understand the pros and cons and what qualifies

Oct 18, 2016 01:36 AM
Rainer
54,743
Joe D'Agostino
NMLS# 729950 - Manahawkin, NJ
Mortgage Officer 46 years!

Are you referring a 1031 Exchange? If so this will only apply to investment properties. Primary residence are not allowed. If this is an investment, then it will delay you paying capital gains. Normally you must pick out the new property within 45 days of sale. This is becoming more popular in recent years,so if this applies to you,then do it. I would use a 1031 exchange company,for there are time constraints involved. I believe you must close within 6 months of identifying your new property. As a Mortgage Banker I have done several of these deals, and all use a 1031 Exchange Company. Good luck........Joe

 

Oct 25, 2016 12:10 AM
Rainmaker
3,069,179
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Candice A. Donofrio nailed this one!

Oct 18, 2016 11:51 PM
Rainmaker
3,830,621
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

As Candice A. Donofrio suggested, speak with a qualified intermediary. 

Oct 18, 2016 11:20 PM
Ambassador
3,722,026
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

You can delay paying capital gains taxes, and there are real estate lawyers who can help you mkae one happen.  They're complicated enough to be above our pay grades.

Oct 18, 2016 02:36 PM
Rainmaker
3,985,753
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

The 1031 can be a geat tool.  It is best to call a qualified exchange company.

 

I would suggesst Starker services.  I think the main office is in California

Oct 18, 2016 01:04 PM
Ambassador
2,216,158
Debbie Laity
Cedaredge Land Company - Cedaredge, CO
Your Real Estate Resource for Delta County, CO

This would be a good question for an attorney and tax professional. 

Oct 18, 2016 11:27 AM
Rainmaker
2,590,904
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

It is used to delay paying taxes and as Nina Hollander says still stay in the Real Estate game. Keep trading up and in the end, when you have had enough, pull out, pay-up and move on....

Oct 18, 2016 08:00 AM
Ambassador
1,706,936
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I suggest taking a class in it before you take the plunge to do it or represent it.

Oct 18, 2016 07:53 AM
Rainmaker
5,176,821
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Coal,

You have received fabulous answers.  Talk to you accountant, or financial adviser.  A

Oct 18, 2016 01:39 AM
Rainmaker
1,662,373
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg Real Estate

1031 I assume. What's not to know? I think it's a great way to offset your equity from taxes & still stay in the real estate business. You have to do it absolutely correctly though or you'll get whacked pretty fast with taxes.

Oct 18, 2016 01:13 AM
Rainmaker
4,799,256
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I've never done one.  Though I have assisted with 1031 exchanges.

Nov 16, 2016 11:33 PM
Rainmaker
1,508,825
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

For you or your client? There are tax benefits reasons, so I'd suggest to speak to your CPA. 

Oct 20, 2016 05:37 AM
Rainmaker
4,564,764
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

I recently closed a 1031, and the client sold the rental property in a different state, and bought another here, that was a bit more, so no issue with touching any of the money.

Oct 20, 2016 01:15 AM
Rainmaker
2,948,905
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

What Jeff Dowler said.  I always use a qualified 1031 intermediary. 

Oct 19, 2016 12:14 AM
Rainmaker
3,854,202
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Ask your accountant or attorney! Use a good qualified exchange company!!

Oct 18, 2016 10:47 PM
Rainmaker
5,539,536
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

consult with an attorney and/or CPA.... 

Oct 18, 2016 10:09 PM
Rainmaker
3,724,207
Richard Weeks
Dallas, TX
REALTOR®, Broker

Best answered by a cpa or tax attorney.

Oct 18, 2016 09:39 PM
Rainmaker
4,433,283
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Talk to your accountant.

Oct 18, 2016 09:32 PM
Rainer
212,963
Dennis Swartz
Full Circle Property Management - Columbus, OH
MBA, GRI...experience counts!

You will know if its right when you pay your tax bill! The only con is that you still own property. The pro is that you avoid taxes today, and the definition of "like kind" is very broad.

Oct 18, 2016 06:59 PM
Rainmaker
3,725,481
Nina Hollander
Coldwell Banker Realty - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Are you talking about 1031 Exchanges? At the end of the day, I suggest you do this with assistance of specialists.

Oct 18, 2016 06:23 PM
Ambassador
4,309,924
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Coal Infantino - a good question on behalf of investors for sure.

And many good answers here.

Good Luck.

Oct 18, 2016 03:48 PM
Rainmaker
1,337,413
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

The last I heard, darn near anything could be considered "like kind" from commercial buildings to certain types of mutual funds!  Just work with a good facilitator and accountant.  They'll be worth the $$ they cost!

Oct 18, 2016 02:05 PM
Ambassador
2,523,346
Fred Griffin Tallahassee Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

     If you want to keep your hard-earned money away from Uncle Sam, this is the best legal tax avoidance route to take.

Oct 18, 2016 12:52 PM
Rainmaker
1,157,329
FN LN
Toronto, ON

Seek professional accounting, tax and legal advice applicable to your jurisdiction(s).

Oct 18, 2016 12:43 PM
Rainmaker
1,524,868
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

Jeff Dowler has an excellent answer.

Oct 18, 2016 12:13 PM
Ambassador
3,986,094
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Contact a tax advisor to be sure you have qualifying properties and if it will help save money for now by deferring the tax consequences.

Oct 18, 2016 11:58 AM
Rainmaker
1,430,777
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Coal Infantino If you have any investments, it is right for you. Major pro is deferred taxes.

Oct 18, 2016 07:13 AM
Rainmaker
793,667
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Accounting question.

Oct 18, 2016 06:17 AM
Rainmaker
568,381
AJ Heidmann ~ CRS
McEnearney Associates, Inc. - Alexandria, VA
YOUR Alexandria & Arlington, VA Real Estate Expert

Coal ~ The old adage is defer, defer, defer, die...  best way to minimize taxes on a property since the heirs get the stepped up cost basis. 

A 1031, Like Kind, Starker or Reverse Starker are all names of an IRS recognized exchange that does not trigger a tax payment.  If you have a property to sell and are looking to buy new property it is great.  As I remember it, you could exchange a motel for timber land or a single family home for a strip mall, but the dollar amount purchased has to at least match the dollar amount sold.  Just about any real estate can be exchanged for any other real estate, but a 1031 specifically excludes personal property.

You do have to be careful that you stay within the time lines, properly identify potential replacements, and don't take receipt of any proceeds or Boot, which is taxable.  I quick Google search on the topic should give you pretty good start, then find a reputable intermediary is you decide to proceed.

Having done one recently on an appreciated duplex out West, it provides a huge benefit.

Oct 18, 2016 05:38 AM
Rainmaker
899,502
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

You really need to discuss this with a 1031 company/lawyer - we can give you examples, but the end result rests with your 1031 company

Examples (must be equal value + $1):

  • House to house
  • Rental units to rental units

Et.c

Oct 18, 2016 04:39 AM
Rainmaker
864,177
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

The biggest advantage is deferred tax payment on one's investment property. I would suggest that you discuss this with your accountant to determine the pros and cons of 1031 exchange.

Oct 18, 2016 02:45 AM
Rainmaker
1,604,878
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

The pros, of course, are the tax benefits of deferring capital gains on the property being sold.  One of the risks I have encountered over the years is due to the deadlines imposed on the exchanges.  If an investor waits too long to make his exchange purchase decision he is not in a good negotiating purchase and ends up over paying for the new property.

Oct 18, 2016 01:17 AM