Learn About 1031 Exchange Company and Qualified Intermediary When Doing A 1031 Exchange In Tucson, Arizona
1031 Exchange... Understanding The Basics
What Is a 1031 Exchange and Why Someone Would Want To Do a 1031 Exchange
A 1031 exchange is a tax-deferred exchange of real estate that allows investors to sell an investment property and reinvest the proceeds into a new property without having to pay capital gains on the sale.
The name “1031” comes from the Section 1031 of the IRS Code, which outlines the rules and requirements of such exchanges.
1031 Exchange Requirments
- Purchase equal or greater value
- Reinvest all of the equity in replacement property
- Obtain equal or greater debt on the replacement property. A reduction in debt can be offset with additional cash from exchanger
The Exchange Process
Things To Look For In A Qualified Intermediary
1031 exchange-qualified intermediaries are typically licensed and bonded. In fact, most states require qualified intermediaries to be licensed and bonded in order to operate legally. This helps to protect taxpayers from potential fraud or mismanagement of funds during the exchange process.
The specific licensing and bonding requirements for qualified intermediaries can vary by state, so it’s important to research the regulations in your state and ensure that any potential intermediary you work with is in compliance. It’s also recommended to work with an intermediary who is experienced and reputable in the industry, and who has a track record of successfully completing 1031 exchanges.
Overall, working with a licensed and bonded qualified intermediary can help provide peace of mind and ensure that your 1031 exchange is conducted in compliance with all applicable regulations.
Common 1031 Exchange Mistakes
- Missing milestone deadlines
- Failing to properly identify replacement property
- Make a poor decision with the replacement property due to being rushed to meet 1031 exchange timelines
- Have seen investors make poor costly decisions when doing a 1031 exchange due to time constraints to avoid paying capital gains
For more information about 1031 Exchange Specialist in Tucson, Arizona visit: 1031 Exchange Beginner’s Guide
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