Can anyone tell me what the stipulations are for a 1031 exchange. To my knowledge, you have 45 days to disclose the exchange, but what is the timeframe to buy another property? Must I reinvest all of my return from the previous investment? If I decide not to do a 1031, what are my tax obligations. I have had the house since june, and I just got to post my first eviction notice…Yeah for me! Any advice or comments on this matter would be greatly appreciated. Thanks in advance.
45/180 period start when the first sale of a relinquished property closes
45 days to identify properties with the following rules
a. identify 3 properties of any value
b. identify as many properties as you’d like, with the value of all purchased properties not to exceed 200% of the value of the relinquished properties.
c. 95% rule…don’t ask, you’re crazy if you do this!
In California, boot has 3-1/3% of it sent to the Franchise Tax Board, failed exchanges have 3-1/3% of the full sale price sent to the Franchise Tax Board.
It’s best to sell and buy with the same entity
New identifications sent to the 1031 accommodator should state that they revoke any previous id’s…otherwise they add to previous id’s.
When you buy under 1031, your intent should be to hold it as investment property, not for resale. It’s good to hold it for at least one year before selling…longer, good–shorter, bad
If you have any specific questions you’d like handled privately, or want some informational material on the subject, send me a private message and I’ll answer your questions or send you materials. Let me know!
Use all your proceeds from you relinquished property, increase your basis, increase your debt, and buy a property(ies) that cost more than your relinquished property, and as long as all properties are investment properties, your taxes will be deferred.