Aside from deciding to sell your current income ,business or property held for the use in your trade, the biggest challenge you will face in contemplating is the use of a 1031 exchange. You will have 45 days from the time of the sale of your old or relinquished property. This does not mean you shouldn't be actively looking while your property is on the market for sale. Many of my successful exchanges were helped by the fact that my seller found something they would like to purchase before the relinquished property was under contract. Many times it motivated my seller to take reasonable offers in order to move on other replacement properties being marketed.
Back to the numbers: The purchase of the replacement property has a deadline of 180 days from the time of the sale of the relinquished property, you will have 45 days to identify three or more properties (covered in an earlier post see the 3 property rule, 200% rule & 95% rule) then the remaining 135 days can be devoted to bringing the property(s) to a closing. With a qualified Intermediary and some pre-planning this can be a smooth transaction that meets your clients new investment goals.
Again the goal of the exchange is to buy even or up your value when purchasing a Replacement property(s) this will allow your client to defer the capitol gains tax, and a sale of this replacement property years down the road will allow another exchange and allow continued tax deferment for even more expensive property acquisitions.
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