When it comes to a tax-deferred property exchange, we at 1031 Exchange Place are here to help you through the ins and outs of the process. We’ve helped countless clients complete a 1031 exchange and save huge sums in unnecessary taxes, all through our friendly service combined with years of expertise.
Unfortunately, through our years in the field we’ve noticed a number of common myths and misconceptions when it comes to 1031 exchanges. Let’s look at some of the most common, and set the record straight.
There are misconceptions here on both sides of the ledger. For some, they believe that a 1031 exchange is too complicated to spend time on, and won’t be worth the eventual payout – this could not be further from the truth, as we can provide you with a simple and seamless process that could net you a huge savings. In most cases, the only thing you need to do is to send us a copy of your purchase and sale agreement and get us in contact with your title company - we'll take care of the rest.
On the flip side, some believe that this process is so simple that their regular attorney or accountant can handle it for them without any additional effort – this is also false. Additionally, if your attorney has performed even a single non-exchange-related service in the last two years preceding your exchange, they are a disqualified party and cannot facilitate your exchange.
Some assume that you have to exchange an apartment for an apartment or a house for a house, but this is not the case. "Like-kind" property includes all types of real estate used for business or investment purposes. More info on like-kind property here >>>
Nope! While you can execute a "simultaneous exchange", there are a number of different 1031 exchange formats and simultaneous exchanges are relatively rare. Of all the available methods, only one of these formats is a literal swap of one property for another. In most cases, an exchangor will sell one piece of property and acquire another within prescribed time restraints. In other cases such as a reverse exchange, an exchanger will purchase their replacement property first.
For more on common misconceptions, or to learn about our 1031 exchange properties or planning services, don't hesitate to reach out to us with your questions!