1031 Exchange Services
We are a Qualified Intermediary (QI) and 1031 exchange advisors. 1031 exchanges can be complex transactions, and if it is not executed properly, you could be responsible for tens or even hundreds of thousands of dollars in taxes owed to the IRS. Our 1031 exchange services help you defer, or in some cases even eliminate, the taxes owed on capital gains from a real estate sale. In a typical transaction, the property owner is taxed on any gain realized from the sale, even if you are planning to invest those gains. Sellers who plan to reinvest proceeds should reinvest that money in real estate in order to benefit from all the proceeds. When you work with a QI, we receive and disburse the funds earned on your relinquished property until you purchase the replacement property, a requirement by the IRS to get the tax deferment. Here’s how a basic exchange goes:
So what is our role in a typical exchange?
- Provide a free consultation to ensure you and (any advisor) do the right type of exchange for your circumstances, understand any important steps before closing on your relinquished property
- Provide instructions and the appropriate documents to the escrow or title company concerning the exchange to be signed at the closing of your relinquished property
- Hold your exchange proceeds in an FDIC-insured, and segregated bank account while you search for and ID suitable replacement property
- Our replacement property assistance program is offered to those who need it
- You’ll identify replacement property in writing during your 45-day period
- Within your 180-day period, we coordinate with your title company and transfer funds on the close of your replacement property
- Exchange funds can only be released to a bonafide real estate closing and with the exchanger’s signed release
Types of 1031 Tax-Deferred Exchanges
You have several options if you are considering a like-kind exchange. No matter what kind of investment property you currently own or are considering acquiring, you can save taxes through a 1031 tax-deferred exchange. By working with a Qualified Intermediary like 1031 Exchange Place, you can participate in:
- Simultaneous Exchanges – trading a relinquished property for a replacement property at the same time.
- Delayed Exchanges – selling your relinquishment property now, and then holding the funds through the QI for a set amount of time while you find the right replacement property.
- Build-to-Suit Exchange – selling a relinquished property, buying a replacement property, then with the funds from your original sale, spending time and money on improvements or construction for the new property.
- Reverse Exchanges – acquiring the replacement property in advance of selling the relinquished property.
- Personal Property Exchanges – trading something besides real property for items that are like-kind or like-class, as defined by IRS rules (which exclude foreign property).
The key to a successful 1031 tax exchange or a like-kind exchange is knowing and understanding the rules that apply to the sale and acquisition of property. Working with 1031 Exchange Place gives you access to some of the most knowledgeable 1031 tax exchange experts in the business; providing options for your exchange and helping you get the most from your 1031 exchange dollars.
Saving More of Your Money with Tax-Deferred Exchanges
When you work hard for the money you earn, so you want your money working for you! You want to find ways to keep as much of your money as possible, and part of that is avoiding paying excessive taxes. Likewise, when buying and selling real estate, you want to keep as much of your money working for you as possible. If you were to undertake a typical real estate transaction, any gains that you realize from the sale of existing property will be taxed even if you reinvest in another property.
To protect against these taxes, the experts at 1031 Exchange Place can help you with a 1031 tax exchange, named after section 1031 of the IRS code. A 1031 tax-deferred exchange allows you to defer the taxes on the sale of a relinquished property, as long as you reinvest the proceeds of the 1031-like-kind exchange into another property that is acquired for business or investment purposes. Since you are not paying tax on the gains from the sale of the original property, you keep the entire proceeds working for you. Even if you exchange the property for a different type of investment—for example, selling agricultural land and investing in a retail property—this is still considered by the IRS as a 1031-like-kind exchange and not be subject to taxes.
Replacement Property Assistance
If you are an investor looking to sell a current property or real estate that you own, but you are not sure where or how you will reinvest the money that you make on the sale, our services for 1031 exchanges include analysis and research to help you identify suitable 1031 properties that fit your current investment strategy and fit well in your overall portfolio. Since 1031 exchanges have strictly mandated time requirements, it can be stressful to find just the right property before losing out on the benefits of the 1031 exchange. The experts at 1031 Exchange Place can review your investment objectives, risk tolerance, property and location parameters, and other criteria. Our team has extensive experience in popular replacement property options like Tenant-in-Common (TIC), Delaware Statutory Trusts (DST), and Net Lease (NNN) properties.