1031Ex.com
1031 Tax Deferred Exchanges:
"Evolving Rules, Greater Opportunities"
Although the delayed exchange variation remains the most common format, many Exchangers have been exploring more creative §1031 exchange strategies. This overview briefly addresses some of the opportunities investors are utilizing.
CONVERTING A RENTAL TO A RESIDENCE
Investors are combining the tax deferral benefits of an exchange (IRC §1031) with the tax exclusion advantages available under the primary residence tax rules (IRC §121). Exchanging into a replacement property that is initially "held for investment," and at a later time converting this rental property into a primary residence, enables a property owner to obtain tax-free funds.
Under the primary residence tax rules, anyone living in a property as their primary residence for 24 months out of a 60-month period is eligible to keep $250,000 tax-free if filing as a single and $500,000 if filing jointly. This exclusion is available once every two years, giving property owners the ability to unlock equity that has previously remained tied up in their investment property.
VACATION HOME EXCHANGES
Investment real estate located in resort or vacation areas may qualify for an exchange if the owner can establish that their "intent" was to hold the property for investment. Property owners in many resort destinations nationwide are exchanging for more desirable properties.
"TENANT-IN-COMMON" PROGRAMS
There is an increase in popularity of exchanges where there is a purchase of a fractional ownership interest in commercial real estate along with other co-owners.
REVERSE 1031 EXCHANGES
The IRS released rules on September 15, 2000 providing a safe harbor for the purchase of a replacement property before selling the relinquished property (a "reverse exchange"). Investors now have guidance to pursue an excellent purchase opportunity before selling the property they currently own.
IMPROVEMENT 1031 EXCHANGES
Some investors choose to build a new property from the ground up or buy an existing property which requires improvements or refurbishments. This opportunity to build a brand new property helps an investor acquire a replacement property that meets their long-term objectives and exact exchange requirements.
REVERSE/IMPROVEMENT EXCHANGES
Combining a reverse exchange with an improvement exchange creates a perfect opportunity to purchase the new property first-and-begin making improvements to this property before the relinquished property is sold to a buyer.
Asset Preservation, Inc
News and Articles
- 1031 Exchange
- 1031 Exchange Q&A
- ABC's of 1031 Tax Deferred Exchanges
- Sale vs. Exchange
- 1031 Tax Filing Requirements
- Exchange Basics
- Five Reasons To Exchange
- Calculating Capital Gain
- Benefits of Delayed Exchanges
- Cooperation Clause
- 1031 Exchange Contracts
- 1031 Exchange Terminology
- Requirements For Full Deferral
- 1031 Exchange Equation
- Partial 1031 Exchanges
- Simultaneous 1031 Exchanges
- Stages of Deferred Exchanges
- Identification Rules
- What Not to Do!
- Like-Kind-Where Located
- Seller Financing
- Partnerships And 1031 Exchanges
- Closing Costs
- Refinancing
- Closing Exchanges
- Hold Title to Real Property
- What Agents Need to Know
- Multiple Properties
- Reverse Comparisons
- Improvement Exchanges
- Improvements Property Owned by Affiliate
- Like-Kind Property
- How Long to Hold
- Converting a Rental to a Residence
- Split Treatment Transactions
- Dealer Property Issues
- Vacation Home Exchanges
- Leasehold Interests
- Easements
- Personal Property Exchanges
- Water Rights
- Timeshares and REITS
- Hotel Exchanges
- Golf Course Exchanges
- Related Party
- Evolving Rules, Greater Opportunities
- Preconstruction Sales
- Reverse Exchanges
- G 6 Restrictions
- 1031 Exchange Basics
- Tenant in Common (TIC)
- Money Wise
- IRS Clarifies Status of TIC Investments
- TIC Tax Brief
- TIC Benefits
- TIC Industry Overview
- TIC Legal Overview
- TIC Guidelines
- TIC Marketplace
- Rev. Proc. Interpretation
- Taxing Complications
- An Overview of IRS Revenue Procedure 2002-22
- TIC Programs
- TIC Programs - Rev.Proc. 2002-22
- SEC Considers TICs as Real Estate
- TIC Controversy Gets a New Twist
- TIC Press Release
- Tax Considerations
- IRS Reporting for a 1031 Exchange
- How to Depreciate Property
- Tax Guide for Sale of Property
- Tax Guide for Passive Investments
- Determining Your Cost Basis
- Highlights of 2003 Tax Changes
- Tax Guide for Installment Sales
- Tax Guide for Small Business
- 2001 Tax Reconcilitaion Act
- 2002 Primary Residence Update 9030
- 2003 CA Withholding Law
- 2003 Capital Gain Tax Changes
- Taxing Thoughts
- FIRPTA Withholding Rules
- Audit
- Real Estate Industry


