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Rachel Greene, Student here! Looking to learn as much as I can (Agent Professor Real Estate School)

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Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

       Legally defer Federal income taxes (capital gains taxes) by using IRC Section 1031 to exchange "Like Kind Properties".  Also known as a Starker Exchange.   You need a Qualified Intermediary.  Many Title Attorneys offer services as a QI, so do many CPAs.

      You are dealing with the IRS, you MUST comply with exact timelines and other requirements.  Talk to the QI, or your own lawyer, or a CPA for details before embarking on a Section 1031.  

     Reporting will be done on IRS Form 8824.  Follow these Instructions for IRS Form 8824

     *Personal example:  My investor friend sold 4 rental townhouses here in Tallahassee, he profited $400K.   We used the Section 1031 to purchase a vacation rental house in North Carolina with the $400K, and deferred paying capital gains tax.

Jan 27, 2018 03:50 PM
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Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

I wish you all the best with your real estate school studies and in your real estate career. 

Jan 27, 2018 05:34 PM
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Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

It's all about using competent professionals to sell one property and buy another, under very specific guidelines, to defer capital gains taxes. 

Jan 27, 2018 03:29 PM
Rainmaker
5,583,278
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

with the guidance of an attorney who is well versed with a 1031 exchange

Jan 27, 2018 03:10 PM
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Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Best to proceed with competent experienced professional advice.

Jan 27, 2018 02:53 PM
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Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

Fred Griffin gave you a great answer.

Jan 27, 2018 08:45 PM
Rainmaker
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Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

1031 exchanges are an excellent way to shelter qualifying sales from immediate payment of income tax due on the gain. There is much written about how this works and also many excrow handlers that do this type work. I suggest getting one of them in your area to coach you and explain the pros and cons. Don't promote yourself as an agent doing these until you know the ins and outs.

Jan 27, 2018 08:20 PM
Rainmaker
7,836,139
Roy Kelley
Retired - Gaithersburg, MD

Follow the instructions of the CPA.

Jan 27, 2018 04:02 PM
Rainmaker
2,220,654
Anthony Acosta - ALLATLANTAcondos.com
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

That depend on each individual, it's best to have your investor talk to you trusted 1031 Exchange provider and find out their options. 

Jan 28, 2018 05:59 AM
Rainmaker
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Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I have no idea... in 25 years have never had a single client, investor or not, do a 1031 exchange. You should get advice from an accountant, lawyer or financial planner here.

Jan 28, 2018 04:41 AM
Rainmaker
5,216,409
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Utilize the services of a CPA, real estate attorney, qualified intermediary or a combination of them. 

Jan 28, 2018 04:27 AM
Rainmaker
1,622,432
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Taxes are the main benefit. 

Jan 27, 2018 11:18 PM
Rainmaker
679,404
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

I would refer this to my title company ... they have handled them in the past for some of my clients.

Jan 27, 2018 08:00 PM
Rainmaker
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Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

What Fred Griffin said.

Jan 28, 2018 06:10 PM
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Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Fred Griffin has a good answer. Something to also discuss with a CPA.

Jan 28, 2018 02:59 PM
Rainmaker
1,153,794
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

Any time you can defer capital gain it's usually a good thing. A Starker or 1031 Exchange is the vehicle to accomplish that in Real Estate. The "like kind" property requirements have softened somewhat so there's more leeway for investors now but essentially it's a way to save on taxes for the time being.

Jan 28, 2018 11:13 AM
Rainmaker
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Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Through a qualified intermediary.  You can exchange "like for like" but the definition of "like" is very broad.  You can 1031 a rental unit to a commercial property, mutual fund, another single family rental or any other form of "investment vehicle."  The qualified intermediary will have all the information you need (they do the faciliation of the exchange).

Jan 28, 2018 09:35 AM
Rainmaker
1,231,853
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

1031 exchanges exist but I am not interested.  Good luck in class.

Jan 28, 2018 07:23 AM
Rainmaker
4,800,082
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

By following the guidelines that are published by the IRS.

Jan 28, 2018 06:28 AM
Rainmaker
3,071,489
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Kathleen Daniels nailed this one!

Jan 28, 2018 04:45 AM
Rainmaker
4,319,419
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Rachel Greene - work closely with your financial advisor of a CPA.

Jan 27, 2018 09:34 PM
Rainmaker
3,986,258
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Contact a professional 1031 exchange company and get the correct info

Jan 27, 2018 08:51 PM
Ambassador
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

carefully with the proper folks in place to make sure it's all handled correctly.  Not all attorneys in my state will close those transactions or can hold funds.

Jan 27, 2018 04:09 PM
Rainmaker
1,712,676
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

It works through a third party accomodator company while all the money stays in escrow if the investor wants to avoid taxes. 45 day id period and six months to close.

Jan 27, 2018 03:14 PM
Rainmaker
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Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL

You got it, now you know.

Jan 02, 2019 11:00 AM
Rainmaker
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Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

You got right answers, Rachel.

Happy New Year and many sales in 2019! 

Jan 02, 2019 10:18 AM
Rainmaker
5,868,554
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

By following the rules, and saving tax dollars.

Jan 30, 2018 07:53 AM
Rainmaker
900,128
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

It's a long answer, best to look it up and get the most recent legal details/tax status, etc.

Jan 28, 2018 12:29 PM
Rainmaker
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John Pusa
Glendale, CA

Rachel Greene consult with an attorney, and many good responses.

Jan 28, 2018 10:00 AM
Rainmaker
1,239,901
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

defer capital gain tax. Rules have changed on business related topics. Please consult with a CPA or 1031 professionals.

Jan 28, 2018 07:41 AM
Rainmaker
1,466,207
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Rachel Greene All an investor has to do is own a property they wish to defer taxes on should they sell.

Jan 28, 2018 06:36 AM
Rainmaker
3,416,038
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

In 32 years of real estate i have only had 1 of these. Not sure why, but investors here seems to buy, fix and sell. 

Jan 28, 2018 06:18 AM
Rainmaker
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Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

There are Exchange Companies set up to assist you with this .

Jan 28, 2018 06:09 AM
Rainmaker
4,882,355
Richard Weeks
Dallas, TX
REALTOR®, Broker

By deferring paying capital gain tax.

Jan 28, 2018 04:23 AM
Rainmaker
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Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Good luck.

Jan 28, 2018 03:57 AM
Rainmaker
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Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Rachel,

There are entities that manage 1031 exchanges.  These third parties often offer free courses as to what is involved.  My suggestion is that you take one of these courses.  You will learn much more than you can here.  A

Jan 27, 2018 04:27 PM