We are in the process of selling some properties in an Iowa General Partnership and were advised to look into “Tax Credit Products” for our 1031 Exchange. The advisor is not available until next month and I’m stuck trying to find more information on TCPs. Can anyone tell me what a “Tax Credit Product” is and where to locate a specialist in these products and 1031 exchanges? TIA ;D
I’ve never heard of “tax credit products” nor does “googling” turn anything up.
1031 exchanges is for exchanging like-kind assets (not only real estate, but other things as well). You need to an accomadator or intermediary help handle the sale of your existing asset and obtain the replacement one. Just selling an asset and buying the same kind again is NOT a 1031 exchange.
Many title companies, escrow companies or closing attys handle this type of thing and can set up the transaction in the appropriate manner.
Thanks for the reply. I have done 1031 Exchanges before, selling and buying multifamily housing. For this exchange, the multifamily RE in our area is overpriced and we were hoping to sell multifamily units and exchange into someting less hands-on. We were advised to look into Tax Credit Products. I understand that means buying a subsidized senior housing center and receiving a direct tax credit for 10% of the purchase price in each of the next ten years. At the end of ten years, we own the building. Maybe someone knows this by a different name? At this point, I have no idea how to proceed…
Google “Low Income Housing Tax Credits” and see if this fits your idea of a tax credit product. Your financial planner should have access to one or more tax credit investment projects that you could consider.
Whether this investment is eligible to participate in a 1031 exchange is a quesiton you might also ask your financial planning advisor.
Thanks for the help. I think this is exactly what we needed!