Last month, MyPropertyWealth.com wrote an article about the reinvestment rules of a 1031 exchange. To pay zero tax in an exchange you must buy equal or up, and you must reinvest all of the cash. But what happens if you want or need some of the cash from your exchange? What are the rules you...
The best way to play the game is to use 1031 exchanges, but it's a tedious process and not many people know how to work the deal.
Defer'Em is one of the best resources for being able to understand the tedious stuff – boot, taxable gain, deferred gain, and new cost basis – and it has a tool you can use to generate IRS Form 8824 for reporting Like-Kind Exchanges on your tax return. Defer'Em is a guided approach that helps you optimize deferrals using all deductible closing costs and exchange fees, and it also generates an Exchange Report which will help you visually understand all the elements of your exchange.
Another benefit is that you can play with the numbers and get familiar with different exchange scenarios, so even if it's going to be a while before you play the capital gains game, you can always practice… just remember, practice makes perfect.
There are so many opinions out there on this subject. The reason for this is the code, regulations and rulings have not really defined it well. We recommend refinancing the property and waiting at least six (6) months before selling and structuring a 1031 exchange, or completing your 1031 exchange and then refinancing after waiting two (2) or three (3) months.
Hello everybody my name is Justin and I'm a Licensed Mortgage Professional serving the whole state of WI. I am looking to pick up some useful information and possibly establish a few relationships through this website and blog!
;)
Links;)
Archives
Justin great post I can't tell you how many underwriters from lenders I have argued with on a 1031...