Steps for a 1031 Exchange

By
Services for Real Estate Pros with Fix My Score

 

Year End Tax Issues:

 

If a Taxpayer closes an exchange

  1. Between October 17th and December 31st;
  2. Files their tax return on April 15th;
  3. Desires the ability to have up to 180 calendar days to complete their exchange by purchasing one or more replacement properties…

 

then the Taxpayer must:

 

File for an extension using Form 4868, which would extend the date the Exchanger’s tax return is due. If the tax extension is not filed by their tax filing date, the Exchanger’s “exchange period” is shortened to the actual date their tax return is due and filed.

 

 

Form 8824 for Reporting the Exchange

 

Form 8824, “Like-Kind Exchanges,” is filed to reflect the exchange on the Exchanger’s tax return in the year the transaction began (i.e. the year the Relinquished Property was sold to a buyer).

 

 

The following lists the sequential steps to planning a successful §1031 Tax-Deferred Exchange:

 

  1. Talk to a Tax Advisor and/or Legal Advisor

 

  1. Enter into contract to sell the Relinquished Property

 

  1. Contact NCS Exchange Professionals to open exchange via online order at www.ncs1031.com (select “Set-up My 1031”) or by calling toll-free
    866-873-1031

 

  1. Exchange Agreement prepared – this needs to be prepared prior to the close on the sale of the Relinquished Property

 

  1. Relinquished Property closes

 

  1. Timing begins – 45 days to identify Replacement Property and 180 days to close on the identified Replacement Property

 

  1. Enter into contract to purchase the Replacement Property

 

  1. Contact NCS Exchange Professionals to prepare paperwork for Replacement Property

 

 
 

Volume #2009, Issue #12

 

Tips for Planning a Successful §1031 Exchange

 

Comments (3)

Gwen Fowler-864-638-3599 SC * Mountain* Lake*Home
Gwen Fowler Real Estate, Inc - Walhalla, SC
Gwen Fowler Real Estate, Inc.

I am amazed at how much bad information is out on this subject.  I have a 1031 expert that I call and put the person with. I do not want to be miss quoted.  I know just enough to be dangerous.

Feb 19, 2010 06:51 AM
David Monsour
Keller Williams Keystone Realty - Gettysburg, PA
ABR - www.realty-insights.com

These are pretty tricky, my only advice is to make sure you know someone that has experience to help you through the process.

Feb 20, 2010 07:04 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

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Sep 22, 2016 10:43 AM