1031 EXCHANGE
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What is a 1031 Exchange?
An IRS Code 1031, which has become a popular real estate investment
Strategy, that allows owners to defer capital gains taxes by selling a
property, identifying a like-kind replacement property within 45 days, and
closing escrow on the new property within 180 days. A property owner, that
does not do a 1031 Exchange, is taxed on any gain realized by the sale of
the property. In 1031 Exchange, some or all of the tax on the transaction is
deferred until some time and action in the future, usually until the newly
acquired property is sold without doing a 1031 Exchange. (Presently taxes
can be deferred indefinitely doing successive 1031 Exchanges by
relinquishing one and acquiring another).


What is Revenue Procedure 2002-22?

This is the new guidance from the IRS which makes it clearer and outlines
how to structure a fractional-deed Tenants In Common (TIC) co-ownership of
property by individuals who want to do a tax deferred 1031 Exchange.


What is "like-kind" property?
'Like-kind' can be all types of Real Estate and can be exchanged for other
Real property, such as vacant land for an apartment building or a rental
home for a retail center as long as the guidelines are properly followed.

Can one do a 1031 Exchange with foreign property?

Presently only property located within the fifty United States and the U.S.
Virgin Islands are eligible for a 1031 Exchange.


With the Proc. 2002-22 by the IRS in the year 2002, a Tenant In Common (TIC)
fractionalized co-ownership interest is considered like-kind and qualifies
for Section 1031 consideration. The investor's interest in the property must
have been held by the owner for the productive use in trade or business, or
for investment, but not personal property. (Please see “FAQ – Tenant In
Common (TIC) )

What are the identification and closing
periods?

The identification and closing periods are very strict time lines and
limitations that have to be adhered to precisely. Once the property that an
owner is selling has closed, s/he has 45 days from the date of sale to
identify like-kind replacement property/s, which terminate at midnight on the
45th day following the transfer date. The property/s that has been identified,
the owners have 180 days to close, which include Saturdays, Sundays or
holidays.

You can select and identify several (or multiple) properties, and even
change your mind about your choices during the period. However, you may
ONLY acquire a property that was identified during the 45-day period, not
after.

What does an Exchange
Accommodator (Qualified
Intermediary) do?

The Qualified Intermediary and the Exchange Accommodator is the same
thing. They act as a “safe harbor” approved by the IRS to hold the exchange
proceeds and to make sure that the structure of the exchange is properly
observed. Note that there are many persons who are Disqualified by the IRS
to act as Accommodator: your attorney, your accountant, your broker,
investment banker, or a relative cannot perform the Exchange for you.


The Accommodator does more than just hold the money to avoid
“constructive receipt”, they actually create the mechanism for a trade. In
the case of a Reverse or Improvement Exchange, they provide a safe
harbor for the title of the replacement property to be “parked” until the
exchange is completed.

When will I have to pay taxes on the
gains?
The taxes on the gains are ‘recognized’ when the owner disposes of the
Replacement Property and does not get into another 1031 Deferred
Exchange and that becomes a fully taxable transaction. If the owner
continues to execute 1031 Exchanges, the gain may never be recognized
and there are no time or number limits as to when and how many 1031
Exchanges one can do.

Who is eligible to do 1031 Exchanges?
Individuals, Corporations, LLC’s, and Partnerships are eligible to do 1031
Exchanges, providing it is ‘like-kind exchanges. Stocks and partnership
interests are specifically excluded from being considered like-kind to real
estate.

Disclaimer:
Information on this site is only for informational
purposes only. The information provided through
our website is not a substitute for legal and other
professional advice where the facts and
circumstances warrant. If any user requires legal
advice or other professional assistance, each such
user should always consult his or her own legal or
other professional advisors and discuss the facts
and circumstances that apply to the user
1031 Exchange, Tax Saving Tips for Real Estate Investors and landlords. 1031 Like-Kind Exchanges and
Multi-Family Investments:    
1031 Exchange Rules Every Real Estate Investor Should Know..
    
1031 Exchange Rules Every Real Estate Investor Should Know..
!
"How To Explode Your Wealth With 1031 Tax-Deferred Exchanges"
ADVANTAGE AND DISADVANTAGE
OF REAL ESTATE
Tax Advantages -
Your rental income may be tax free if you do not receive net cash flow after
expenses are deducted. This means that your mortgage is being paid down
and you own more of the total value of the property (rather than just
controlling it), but you do not pay taxes on the money that is doing this for you.
In addition to this, you can also pull out tax-free money by refinancing your loan

if the property appreciates and the interest rates have
fallen. Lastly, you may be able to avoid paying taxes on the sale of a rental
property if you sell it and reinvest the money in another property (called
switching or tax-free exchange).  

Disadvantages of Rental Real Estate
For every upside, there is a downside, and rental real estate is no different.
Rental real estate may expose you to the following:

Liability - What happens if a stair breaks under your tenant's feet? With the
increase in frivolous lawsuits and the unquantifiable nature of "emotional
distress", liability can be a scary thing. Providing someone with shelter
in return for money puts you and the tenant in a relationship where both parties
bear responsibility. You have to be certain that the property you are renting out
meets all government codes.

Unexpected Expenses - What do you do when you pull up the basement carpet
and find a crack that opens onto the abyss? It is impossible to prepare for
every expense related to owning rental property, so there are
bound to be some unexpected ones. Things such as boilers, plumbing and
fixtures often need to be replaced and are not prohibitively expensive.
However, faulty wiring, bad foundations, compromised roofing and the
like can be very expensive to repair.

If you can't find a way to pay for repairs, you will be left without a tenant and
with the grim prospect of selling the property at a significant discount. Also, as
building codes evolve over
time, lead paint, asbestos, cedar roofing tiles and other materials that passed
inspection in the past may be reevaluated to your disadvantage.

Bad Tenants - No one wants to have to use a collection agency to collect
overdue rent. Unfortunately, almost every landlord has a story that involves
police cars escorting his or her tenant out of the property - erasing all
hopes of getting the five months' worth of overdue rent. Bad tenants can also
increase your unexpected expenses and even hit you with a lawsuit.

Vacancy - No money coming in means that you have to make the payments out
of your own pocket. If you have an emergency fund for the rental property, you
will be able to survive long vacancies with little trouble. If
you don't have one, you may find yourself scrambling to pay the rent to the
harshest landlord of all - the bank.
Tips
Minimizing the disadvantages of owning real estate is actually quite simple.
While you won't be able to eliminate the pitfalls completely, following these
guidelines will take the teeth out of their bite.

Keep Your Expectations Reasonable - Have the goal of positive cash flow, but
don't expect to be purchasing a new yacht at year's end. If you keep your
expectations in check, you won't be tempted to jack up the rent
and push out good tenants.

Find a Balance between Earnings and Effort - Are you "hands on", or should you
work with a property management firm? Current income doesn't seem so
great if you are putting in another full-time shift working on your
rental property. There are property management firms that will run your rental
property for a percentage of the rental income.

Know the Rules - Federal and state laws outline your responsibilities and
liabilities, so you can't claim ignorance when something happens. You will have
to do some reading; nevertheless, it is better to spend 20 hours in
the library than in the courtroom.

Have the Property Inspected - One of the best ways to avoid unexpected
expenses is to have the property inspected by a professional before you buy it.

Make Sure Your Leases Are Legal - If you make a mistake on the lease, you will
find it more difficult to litigate if a tenant violates the terms.

Take the Time To Call References and Run Credit Checks - Too many landlords
rush to fill a vacancy rather than taking the time to make sure the prospective
tenant is a better option than an empty property. If you have
time, you may want to drive by a prospective tenant's current living space - that
is what your property will probably look like when that tenant lives there.
Join the Landlords' Association in Your Area - Joining an association will
provide you with a wealth of experience as well as sample leases, copies of
laws and regulations, and lists of decent lawyers, contractors and
inspectors. Some associations may even allow you to join before you buy a
rental property.

Make Friends with a Lawyer, a Tax Professional and a Banker - If you find that
you like owning rental properties, a network including these three
professionals will be essential if you want to increase your holdings.


Make Sure You Have the Right Kind of Insurance - After learning the rules, you
will need to buy insurance to cover your liability. You will need the help of an
insurance professional to select the proper package for your
type of rental property.

Create an Emergency Fund - This is essentially money earmarked for
unexpected expenses that are not covered by insurance. There is no set
amount for an emergency fund, some say 20% of the value of the property,
but anything is better than nothing. If you are getting current income from a
property, you can pool that money into an emergency fund.

Conclusion
Investing in a rental property can be an excellent decision if you go into it
informed. Consider these words from Donald Trump: "It's tangible. It's solid. It's
beautiful. It's artistic … I just love real estate
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REAL ESTATE TAX
SAVING FOR
INVESTORS AND
LANDLORDS

Real estate investments have been on the rise for
while and on the fall for while. In the up and down
market the investors are increasingly faced with
real-estate specific tax issues. With appreciated
stock, you can sell your shares over a number of
years to spread out the capital gains.

Unfortunately, investment real estate is not granted
the same luxury; the entire gain amount must be
claimed on your taxes in the year the property is
sold. In this article, we explain one way to avoid
taxes when selling real estate: the Internal Revenue
Code Section 1031 exchange.


Dealing with Appreciated
Real Estate
One downside of real estate investments is that they
are not liquid assets like stocks or bonds. Even in
today's booming market, it can sometimes take
more than a year to settle a real estate deal. If
you've decided to sell your real estate and get out
while the getting is good, you may be faced with a
hefty tax bill on your gain.

You could mitigate this tax burden by controlling the
year in which title and possession passes and,
therefore, the year in which you report the profit or
loss on the transaction. In other words, you can set
the transfer of ownership to a year in which you
expect to have a lower tax burden. However, if your
income is steady and paying tax on the gain looks
inevitable, you may want to consider using the IRC
Section 1031 exchange. (For further reading, see A
Long-Term Mindset Meets Dreaded Capital Gains
Tax.)
The 1031 Exchange
The 1031 exchange allows an investor to trade real
estate held for investment for other investment real
estate and incur no immediate tax liabilities. Under
Section 1031, if you exchange business or investment
property solely for business or investment property of
a like kind, no gain or loss is recognized until the newly
acquired property is sold. Keep in mind that Section
1031 does not apply to exchanges of inventory, stocks,
bonds, notes, evidence of indebtedness and certain
other assets.

Fully Tax-Free Exchange
For a tax-free 1031 exchange
transaction to occur, certain
conditions must be met:

Property must be "like kind" - Properties are like kind if
they are of the same nature or character, even if they
differ in grade or quality.

Property must be related to business or investment -
Exchanged property must be held for productive
business or investment use and traded for the same
use.

New property must be identified within 45 days - The
new property that you intend to receive in exchange for
your existing property must be identified in writing
within 45 days of the first transfer.

Transfer must take place within the 180-day window -
The like-kind property must be received by one of
these two dates (whichever comes sooner): within the
180-day period following the property transfer, or by
your tax return due date (including extensions) for the
year in which you transferred the property.
FIVE REASONS TO EXCHANGE

“INVESTORS CAN MEET MANY
OBJECTIVES UNDER IRC §1031”


Section 1031 tax deferred exchanges continue to increase in popularity as
more investors nationwide discover the wide range of investment objectives
that can be easily met through exchanging.

I. PRESERVATION OF EQUITY

A properly structured exchange provides real estate investors with the
opportunity to defer 100% of both Federal and State capital gain taxes. This
essentially equals an interest-free, no-term loan on taxes due until the property
is sold for cash! Often the capital gain taxes are deferred indefinitely because
many investors continue to exchange from one property to the next,
dramatically increasing the value of their real estate investments with each
exchange!

II. LEVERAGE

Many investors exchange from a property where they have a high equity
position, or one that is “free and clear”, into a much more valuable property. A
larger property produces more cash flow and provides greater depreciation
benefits, which therefore increase the investors’ return on their investment.

III. DIVERSIFICATION

Exchangers have a number of opportunities for diversification through
exchanges. One option is to diversify into another geographic region, such as
exchanging out of one apartment building in Denver, Colorado, for two additional
apartments – one in Los Angeles, California, and the other in Dallas, Texas.
Another diversification alternative is acquiring a different property type, such as
exchanging from several residential units to a small retail strip center.

IV. MANAGEMENT RELIEF

Some investors accumulate several single-family rentals over the years. The on-
going maintenance and management of what can be a far-reaching group of
properties can be lessened by exchanging these properties for one property
better suited to on-site maintenance and management. Exchanging into a single
apartment complex with a resident manager is a good example of this strategy.

V. ESTATE PLANNING

Sometimes a number of family members inherit one large property and
disagree about what they want to do with it. Some want to continue holding the
investment and some desire to sell it immediately for cash. By exchanging from
one large property into several smaller properties, an investor can designate
that, after their death, each heir will receive a different property, which they can
either hold or sell.

TM 1031 Exchange and Asset Preservation, Inc. do not give tax or legal advice.
The information contained herein should not be relied upon as a substitute for
tax or legal advice obtained from a competent tax and/or legal advisor.
(c) Copyright 2005 Stewart Title Guaranty Company
1033 Tax Deferred
Exchange Frequently Asked
Questions (1033 Exchange
FAQs)

The following 1033 tax-deferred exchange frequently asked questions
(FAQs) have been compiled by our team of tax-deferred exchange
experts to provide our clients and their advisors with answers to the
most commonly raised questions regarding Section 1033 of the Internal
Revenue Code.

Exeter 1031 Exchange Services, LLC provides these tax-deferred
exchange frequently asked questions as a courtesy to our clients and
their advisors. While every effort has been made to provide correct,
accurate and useful information, Exeter 1031 Exchange Services, LLC
does not warrant or guarantee the information and/or opinions in any
way, nor provide endorsements for any of the authors contained herein.
Please read our legal terms and conditions.

What is an “Involuntary
conversion”?

How do I elect to complete
a 1033 exchange?

What requirements must I meet to defer
my tax liability on the involuntary
conversion of property under Section
1033?

What does “Similar or related in service or
use” mean?

I lost my home in a recent disaster. Does Section 1033 apply to my loss?


Our Senior 1031 Exchange Specialists are also available 24 hours a
day, 7 days a week, 365 days a year to answer your 1033 tax-deferred
exchange questions.  Simply click here to schedule an immediate call
back from one of our Senior 1031 Exchange Advisors.


--------------------------------------------------------------------------------

Here are the Answers to
your 1033 Exchange
Frequently Asked Questions

What is an “Involuntary
conversion”?

Under Section 1033, an involuntary conversion is defined as a
destruction or loss of the property through casualty, theft or
condemnation action pursuant to government powers of eminent
domain, and the resulting compensation from such destruction or
condemnation.

Even though the sale and/or compensation for the property were
essentially forced on the taxpayer, the taxpayer is still liable for any
capital gain tax liability on the compensation received. However, if the
property is subject to an “involuntary conversion”, the taxpayer has the
ability to defer the payment of the depreciation recapture and capital
gain taxes on the involuntary conversion under the non-recognition
provisions of Section 1033. [IRC Section 1033].

How Do I elect to complete a 1033
exchange?

No gain or loss is required to be reported on the tax return for the year
of sale or loss. The taxpayer should however speak which their CPA to
make sure the details relevant to the conversion and/or loss are
reported the year in which they occurred and to notify the CPA that the
taxpayer intends to complete a 1033 exchange, as if for whatever
reason the exchange can not be completed, then it will be necessary
for the CPA to file an amended return reporting the gain. [Regs. Section
1.1033(a)- 2(c)(2)].

What requirements must I meet to
defer my tax liability on the
involuntary conversion of property
under Section 1033?

If it is clear that the manner in which the taxpayer lost the property was
in fact a qualified “involuntary conversion”, then there are two real
qualifications the taxpayer must meet to be eligible for non-recognition
of gain under Section 1033.

First, Section 1033 only allows non-recognition of gain where the
replacement property is purchased within the applicable time
guidelines.  In cases of casualty or theft, the property must be replaced
within a period of two years after the end of the first taxable year in
which any part of the gain is realized, in the case of eminent domain, the
property must be replaced within three years after the end of the first
taxable year in which any part of the gain is realized.

Second, Section 1033 requires that the property lost to involuntary
conversion be replaced with like-kind property. This is similar to the like-
kind provision under Section 1031, but no where near as liberal. In order
to be deemed like-kind under Section 1033, any proceeds received
must be reinvested in property that is “similar or related in service or
use” to the property lost, and hence is a much stricter standard than
the like-kind standard used under IRC Section 1031

What does “Similar or related in
service or use” mean?

For purposes of Section 1033, the restriction means that the end use of
the new property must be substantially similar to the end use of the old
property. So for example, a taxpayer that lost timberland property used
for logging could not replace that property with a parking lot and qualify
for non-recognition under Section 1033.

Property that has been condemned enjoys more liberal treatment, and
instead of being judged by the “similar or related in use” standard, is
determined by expansive definition of like-kind similar to that of Section
1031. This means for the purposes of condemned property, the
replacement property will be deemed to be like-kind and the
requirements met so long as both the condemned and the replacement
property are characterized as real property at law.

If the property that has been involuntary converted is a leasehold
interest, then the lessee's use of the property is not determinative for
purposes of the like-kind requirement under Section 1033. Rather, the
determination of whether or not the replacement property constitutes
like-kind property will be based on the similarity of the lessor’s interest
in the property, in such characteristics as the management and tenant
requirements.

I lost my home in a recent disaster.
Does Section 1033 apply to my
loss?

Yes. In fact, there are special rules that apply if you lost your home in a
Presidentially declared natural disaster. In cases where the converted
property is in a declared disaster zone, the rules relating to application
of Section 121 (see “Frequently Asked Questions under Section 121”)
are substantially more liberal.

On property destroyed/lost in a Presidentially declared disaster, Section
1033 provides that any proceeds received for the residence or its
contents are treated as received for the conversion of a single item of
property, and any replacement property similar or related in service or
use to the residence or the contents will qualify as replacement
property for the purposes of Section 1033.

Further, if the taxpayer has lost property in a Presidentally declared
disaster, as opposed to a ordinary casualty), Section 1033 gives the
taxpayer a two year extension on the replacement period, so the
taxpayer has a total of four (4) years in which to replace the lost
property. [IRC Section 1033(h)].
What is a 1031
Exchange?

Section 1031 of the Internal Revenue Code
and the deferred exchange regulations
allow a seller of real estate to defer the
federal gain on the sale of real property
held for business use or for an investment if

the property is used in a trade or business
or held for investment,
the property is exchanged for like-kind
property, and
certain time frames for identification and
acquisition of the replacement property are
met.
Three-property rule: You can identify
up to three potential properties to buy as long as you
close on at least one of them.

200% rule: You can identify any number of replacement
properties you want to purchase so long as their
eventual combined fair market value isn’t more than
200% of your relinquished property.

95% rule: You can ignore the 200% rule and
identify any number of potential replacement properties
for any amount as long as you buy 95% of the aggregate
value of those properties.

While these rules are complicated, they must be
followed—there are no exceptions or extensions. If you
mess up, the IRS could decide you don’t quality for a 1031
exchange and send you a huge tax bill. So make sure you
know how it works.

Section 1031 of the Internal
Revenue Code, the properties
exchanged must be held for productive
use in a trade or business or for
investment.

Stocks, bonds, and other properties are
listed as expressly excluded by Section
1031 of the Internal Revenue Code,
though securitized properties are not
excluded.
1031 Exchange Rules for
Successful Real Estate
Investing’’

The Three-Property Rule - Up to
three properties regardless of their market
values.
All identified properties are not required to be
purchased to satisfy the exchange; only the
amount needed to satisfy the value
requirement.

    The 200% Rule - Any number of
properties as long as the aggregate fair market
value of all replacement properties does not
exceed 200% of the aggregate Fair Market
Value (FMV) of all of the relinquished
properties as of the initial transfer date.

All identified properties are not required to be
purchased to satisfy the exchange; only the
amount needed to satisfy the value
requirement.
1031 Exchange Rules for
Successful Real Estate
Investing’’

The 95% Rule - Any number of
replacement properties if the fair market value of the
properties actually received by the end of the exchange
period is at least 95% of the aggregate FMV of all the
potential replacement properties identified.

In other words, 95% (or all) of the
properties identified must be purchased or the entire
exchange is invalid. An exception to the 95% rule is that
if you close on a property within the 45 day period it still
qualifies for the exchange.
How To Do a 1031
Exchange Right Now?
To do a 1031 exchange effectively, you must
exchange one property for another property of
similar value. In the process you avoid capital gains,
at least for a while.
    
An investor will eventually cash out and
pay taxes, but in the meantime, an investor can
trade properties without incurring a sudden tax
obligation. It’s an important tool for real estate
investors that has become a bulls-eye for tax reform
evangelists.

However, the 1031 Exchange Rules
require that both the purchase price
and the new loan amount be the same
or higher on the replacement property.
There are actually only seven simple points to master
to have a clear understanding of the rules pertaining
to 1031 exchanges.

With the limited exception of subtle nuances, any
realtor can share with customers all they need to
know about 1031 exchanges.

While the technical terms used to describe
properties in an exchange (rollover) are
“relinquished properties” and “replacement
properties”
The first requirement for a
1031 exchange (rollover) is that the old
property to be sold and the new property to be bought
are like kind.

2nd Requirement: 45 Day
Identification Period

The Internal Revenue Code requires that the new
property be identified within 45 days of the closing of
the sale of the old property.

The 45 days commence the day
after closing and are calendar
days. If the 45th day falls on a holiday, that day
remains the deadline for the identification of the new
properties. No extensions are allowed under any
circumstances.

If you have not entered into a contract by midnight of
the 45th a list of properties must be furnished and must
be specific. It must show the property address, the legal
description or other means of specific identification.
3rd Requirement::
The 180 Day
Purchase Period..

This rule is simple and straight forward.
Section 1031 requires that the purchase and
closing of one or more of the new properties
occur by the 180th day of the closing of the
old property.

The property being purchased must be one
or more of the properties listed on the 45
day identification list. A new property may not
be introduced after 45 days.

These time frames run concurrently,
therefore when the 45 days are up the
taxpayer only has 135 days remaining to
close.
4th Requirement: Use of a
Qualified Intermediary--

Sellers cannot touch the money in between the sale of their old
property and the purchase of their new property.

By law the taxpayer must use an independent third party
commonly known as an exchange partner and/or intermediary to
handle the change.

5th Requirement: Title must be
mirror image

Section 1031 requires that the taxpayer listed on
the old property be the same taxpayer listed on the new
property. If you and your wife are married and sell the old
property than you and your wife must also be on the title to the
new property.

If a trust or corporation is in title to the old property that same
trust or corporation must be on title to the new property.

6th Requirement: Reinvest
Equal or Greater Amount
In order to defer 100% of the tax on the gain of the sale of old
property, the new property must be of equal or greater value.

There are actually two requirements within this rule. First, the
new property has to be of greater or equal value of the one
which is sold.

Secondly, all of the cash profits must be reinvested. In reality
you may deduct closing expenses and commissions from the
sale of the property being sold.
7th Requirement: Reverse Exchanges
– Title To Both Properties Cannot Be
In Same Name at Same Time

All previous requirements are applicable…..and then some. A
reverse may come in handy when a seller does not yet have
a buyer for the property that he wishes to sell and is afraid of
losing the new property he wishes to acquire.
Purchase and Sale Contract Language

In the event that a property will or may be the subject of a
1031 exchange, it is advisable to include the following
language, as specified, in both the contract to sell
“Like-Kind” Rules
The Replacement Property must be considered like-kind
to the Relinquished Property. The like-kind requirement is
broad for real property exchanges.

For example, an office building can be exchanged for
vacant land, an apartment building can be exchanged for
a single family rental home, or a duplex can be exchanged
for a retail strip center.
---------------

Time Extensions
Extensions for an exchange are not granted on a case by
case basis. Where the President declares one or more
counties to be federal disaster areas, affected taxpayers
who reside, have a business in,

or are involved in a 1031 exchange with respect to
properties in these counties may be eligible for up to a
120-day time extension for completion of their exchange
under the 180-day rule and submission of their 45-day
letter identifying prospective Replacement Properties.
How to Do 1031 Exchanges
to Defer Taxes
The Definition of Like-Kind Properties Has Changed Over
the Years

1031 Exchanges Defer Taxes

The 1031 Exchange has been cited as the most powerful
wealth-building tool still available to taxpayers. It has been
a major part of the success strategy of countless financial
wizards and real estate gurus.

Taking its name from Section 1031 of the
Internal Revenue Code, a tax-deferred exchange
allows a taxpayer to sell income, investment or business
property and replace it with a like-kind property.

Capital gains on the sale of this property
are deferred or postponed as long as the IRS rules are
meticulously followed. This is a wise tax and investment
strategy as well as an estate planning tool.

1031 Exchanges are Subject to the 180-Day Rule

Once a replacement property is selected, the taxpayer has
180 days from the date the Relinquished Property was
transferred to the buyer to close on the new Replacement
Property.

However, if the due date on the investor's tax return, with
any extensions, for the tax year in which the Relinquished
Property was sold is earlier than the 180-day period, then
the exchange must be completed by that earlier date.

Remember, a portion of this period has already been used
during the Identification Period.

Definition of Like-Kind Real
Estate

Income Revenue Code 1031(a) defines like-kind properties
as those that have been held for productive use in a
business or trade or as an investment. Like-kind, as used in
this code, means a property that is similar in nature or
character, regardless of differences in grade or quality.

Types of Like-Kind Real
Estate

Both the relinquished property that is sold must be a
qualified property as well as the new replacement property.

This means that an investor can not sell his personal
residence and expect 1031 tax deferral benefits.

However, a property that has been used in a taxpayer’s
business or trade, including his/her place of business or
office facilities, is a qualified property.
What are the Identification and
Receipt Rules?

The identification rules in a 1031 exchange include the
following:

The 45-day requirement to designate replacement property
The 3-property rule
The 200-percent rule
The 95-percent rule
The incidental property rule
Description of Replacement Property
Property to be produced

The 45-day Identification Rule

The exchange regulations provide “The identification period
begins on the date the taxpayer transfers the relinquished
property and ends at midnight on the 45th day thereafter.”
IF YOU NEED HELP TO SELL A REAL ESTATE
PROPERTY IN THE SOUTH FLORIDA AREA;
PLEASE CALL  ANTONY A PROFESSIONAL
REALTOR AT:  --- F. Int. Realty

WE'RE COMPETENT, WE'RE LOYAL, & WE'VE
ALL THE EXPERIENCE NECESSARY IN REAL
ESTATE, INSURANCE, FINANCE &
MORTGAGE TO HELP YOU!
We'll help you
find your dream
home! =

We'll help you
sell your
property!
'' Tax Lien Certificates And Tax Deeds''
Learn how to better make money risk
free.. LEARN MUCH MORE FROM HERE...
-------
'' REIT: Real Estate Investment Trust -
Learn how to invest in real estate with
less than $1,000, no mortgage, no credit
needed. Easy & Simple.. LEARN MORE
HERE...
---------
''Need a Realtor In South Florida..
Look No Further.. Contact Anthony
At: 786-631-7740 -  = Real Estate: ''
Buy - Sell - Investing - Rent ''
''  '' Real Estate News And
Blogs: '' Real Estate Investing
Tools & Resources. LEARN
MORE...
----------------
' '' FREE Home Value Report! ''
How Much Is This House
Worth? '' Find Out Now For
FREE Fast, Easy & Simple. -
Free Comparative Market
Analysis (CMA) -
'' Free Broker's price opinions {
B P O }... LEARN MORE...
--------------
'' Home Inspection: Here's What
Everyone Needs To Know About
Home Inspectors & Inspection
Step One - Step Two & Step
Three.. LEARN MORE...
---------------
'' Real Estate For Seniors // = //

'' Real Estate For Buyers / ''

Real Estate Listings // =

Real Estate For Investors =//=
'' How To Own Investment
Homes - Income Producing
Properties -. LEARN MORE...
-------
'' Real Estate Info About:  
Single Family Home -
Town-home - Co-Op -
Condominiums - - Timeshare.
LEARN MORE...
-------------
'' Real estate Portfolios. How
To Find The Best Real Estate
Investments? LEARN MORE..
--------------
Commercial Real Estate: Ways
to Evaluate Commercial
Property.. How To Get Involve
In Commercial Properties?
LEARN MORE..
-- Agent Anthony Is On
Every Social Media You
Can Think Of. Please
Follow Us, Connect With
Us, Like Us...

'' Facebook  / - / Twitter  / -
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Trulia/Zillow  / - /  Agent
Athony Website  / - /

'' Agent Anthony on
Google+ Plus  / - /   '' Agent
Anthony Blogs  / - /  Agent
Anthony Webpage  / - /

Agent Anthony Activerain  /
- / Profile Of An Agent  / - /
Anthony Jeanty, Agent
Anthony Is Proud To Serve &
To Help The People In Miami
Dade, Broward & Palm Beach
County, Florida With Their
Real Estate Needs And Also
Life Insurance.
------------
Thank You In Advance For
Thinking About  Anthony
Jeanty, Agent Antony As Your
Potential Agent.
---------/
'' '' Find Your Real Estate
Agent In South Florida'' / - /   
We combine meaningful track
records with expertise and
professionalism to help you
make a confident choice about
buying real estate in Florida.
'' Real Estate Home Buying  /
-/  Real Estate Home Selling  /-
/  Real Estate Home Renting  /-
/
'' Real Service For Investors,
Buyers And Sellers...
'' The Real Estate Blog That
Everyone Should Know About..?
-------------
'' Real Estate is a road-map  to build
wealth, // = // . Real Estate
Information center
---------------
'' Miami Beach - Bal Harbour -
Sunny Isles Beach - Real Estate
Listings And Homes For Sale...
-----------
'' Miami Shores, Florida - Biscayne
Park - El Portal Beautiful Homes For
Sale;  Real Estate Listings Of The
Highest Quality...
-------------
'' North Miami, Florida Real Estate:
Sans Souci Estate, Keystone Point  
Homes And Condos Listings,
Gorgeous, Prestigious Community..
------------
'' North Bay Village, Florida -
Treasure Island Real Estate &
Homes, Conminiums For Sale &
Apartments For Lease...
-------------
'' Aventura Florida - Williams Island
- Sunny Isles Beach:  Real Estate
Listings, Homes, And Condos For
Sale..
--
--'' Bay Harbor Islands, FL -
Surfside - North Bay Village Real
Estate Listings & Homes For Sale

'' Real Estate For Sellers // = // '' Real
Estate For Buyers /

'' Real Estate Listings // = // ''
Commercial Real Estate Investing/'''
/
Anthony Jeanty, Agent Anthony Is Proud To Serve & To Help The People In Miami Dade, Broward & Palm
Beach County, Florida With Their Real Estate Needs And Also Life Insurance.
------------
Thank You In Advance For Thinking About  Anthony Jeanty, Agent Antony As Your Potential Agent.
------------
Agent Anthony Is On Every Social Media You Can Think Of. Please Follow Us, Connect With Us, Like Us...

'' Facebook  / - / Twitter  / - /  Linkedin  / - /  Trulia/Zillow  / - /  Agent Athony Website  / - /

'' Agent Anthony on Google+ Plus  / - /   '' Agent Anthony Blogs  / - /  Agent Anthony Webpage  / - /

Agent Anthony Activerain  / - / Profile Of An Agent  / - /
'' OUR MISSION   //    '' OUR VISION   //  '' OUR VALUE   //   '' OUR EXPECTATION   //   ''  SUCCESS STATEMENT  //