1031 Mailbag: Can You Do a Reverse Like-Kind Exchange for a Replacement Property Worth Less than the Original? - 08/24/09 02:58 PM

We received this inquiry from a successful Realtor® in a resort Community in Maryland- Can You Do a Reverse Like-Kind Exchange for a Replacement Property Worth Less than the Original? Q: Let's say you have a place on the market for $1,350,000 and want to buy a place that is less. Can you still perform a 1031 exchange? Furthermore, let's say you want to take cash out of the place for sale to buy the other prior to the sale of the one your selling, basically a reverse exchange of a property substantially less. Is this possible as well? A: … (0 comments)

Navigating Closing Costs and the 1031 Tax Deferred Exchange - 08/19/09 04:05 PM

When entering into a 1031 exchange one often does not consider the ancillary costs that come with closing the transaction. Often the assumption is made that these costs will be subsidized by the 1031 exchange proceeds. However, while some of these costs certainly can be bankrolled by the tax deferred exchange, some cannot. Knowing how to avoid these expenses being deemed boot can keep your transaction out of hot water.
 Covered Costs:
It is generally acknowledged that "payment of brokerage commissions from exchange proceeds does not create taxable boot." Thus, payment of these "non-recurring" costs of sale or purchase … (0 comments)

Maryland 1031 Non-Resident Pitfall - 08/05/09 09:45 AM
Like-Kind Exchanges are fairly identical state-by-state. However, locally, in Maryland we have a big pitfall to watch out for when conducting a 1031 Exchange.  When your seller is a Non-Resident of Maryland (does not personally call Maryland their domicile) and they plan to conduct a like-kind exchange upon the sale of a Maryland property, the client must file an exemption form with the Maryland State Comptroller at least 21 days in advance of the relinquished property settlement.
While this may seem trivial, I have seen this one item derail both portfolio sales of one billion dollars and Baltimore row house sales for $50,000.  
… (0 comments)

 

James Brennan, JD/LLM, 1031 Exchanges

Washington, DC

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ES Group

Address: 11150 Sunset Hills Rd., Suite 300, Reston, VA, 20190

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