Today I' m thinking about possible scenarios in a challenging market...and coming up with some good ones (IMO) on how NOT to end up "backwards" with the IRS.. .For example:

The 1031 Like-Kind Exchange , a 2009 Opportunity. Here in the Asheville  NC area, that could mean an investment in the sustainable community .. . but no matter where you live, let's take a look at how the 1031 Like-Kind Exchange could work for you in 2009 and beyond...


WHAT IF...you are an ECO-wise Investor interested in a "simple swap" where you trade 150 acres that you own in Georgia for 150 acres of mountain majesty in Western North Carolina. That sounds easy, doesn't it? In reality, it is unusual for a seller and the buyer to have exactly the same properties of equal size/value, etc..

So careful attention is in order. ... examples...A tax could be 20% of the gain recognized by the sale due to appreciation of the property on the original cost (basis)...Higher tax rates could be triggered... So, to avoid sticky wickets, we always like to make sure a Qualified Intermediary is close at hand.  

WHAT IF... you are a "Baby Boomer" who, over the years has sold assets in tax-deferred retirement plans?  The capital gains that would otherwise be taxable have been deferred until you are ready to cash out of the retirement plan.

WHAT IF...you want an equestrian property in Tryon,North Carolina and want to trade it for your horse farm in Florida, (or vice verse) ? That's when your Qualified Intermediary can facilitate the exchange and avoid the constructive receipt of the proceeds so you don't end up in a pickle with the IRS.. .

Qualified Intermediary:

A Qualified Intermediary is a person (or legal entity) that under the 1031 regulationsenters into a written exchange agreement to act as liaison and facilitator during the 1031 Like-Kind Exchange. This person (or entity) cannot, absolutely, positively canNOT be closely associated with you...canNOT be your trusted accountant or attorney, canNOT be your favorite sister, a family member, your employees, your real estate professional, or your investment banker.

I have interviewed numerous QIs to be sure before I refer my clients to teamplayers of impeccable integrity. The QI assures you that rather than selling an investment property and personally organizing the purchase of the replacement property, you are in safe hands. S/he handles the proceeds of the sale. They go into a special account to control the funds from the sale and the constructive receipt. .thus avoiding triggering capital gain tax.

Now we are moving onward...and forward.... We have opportunity. We have the team facing in the same direction. 1031=Pure Possibility! The 1031 Like-Kind Exchange 2009!

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Curious about sustainable Green real estate possibilities ? Simply pedal on over to  Convivial Blogger Greenolina's  "Green Wheels" BLOG  and SUBSCRIBE 
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The 1031 Like-Kind Exchange in 2009: Don't End Up "Backwards" with the IRS.The Eco-Steward Firm, ALL Eco-Certified® Real Estate Consultants!  Copyright © 2008 All Rights Reserved

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