Also known as a tax deferred exchange, a 1031 exchange allows you to sell an investment property and purchase another “like kind” investment property within a specific time period and be able to defer the gains tax treatment on the sale. In order to benefit from this it is important to follow the following rules:
1. The total purchase price of the replacement “like kind” property must be equal to or greater than the total net sales price of the relinquished property.
2. All the equity received from the sale of the sold real estate must be used to acquire the replacement “like kind” property.
3. The properties involved in the transaction must be “like kind” and both properties must be held for a productive purpose in business or trade as an investment.
4. The proceeds of the sale must go through the hands of a “qualified intermediary” and not through your hands or one of your agents.
5.You must identify replacement properties within 45 days from the date of the date of the closing of the property sold.
6. You must close on the replacement property within 180 days from the date of the sale of the relinquished property.
Failure to strictly adhere to these timelines will result in you paying capital gains tax on the sale by April 15th of the year following the sale.
Contact William J. Reinhardt, Jr. if you believe you may qualify for this kind of exchange. Call 718-377-8880 or send an e-mail to [email protected]
"My name is Emilio. When I was buying my property, I hired Mr William J Reinhardt Jr as my Real Estate Attorney, it was one of the best decision I ever made because he did everything in his power to make sure my purchase was successful. For example, The utilities bills left over by the person who owned the property before me. I said thank you to Bill for not allow me to pay these costly bills." - 5.0 stars | Posted by Emilio Bien Aime | October 1, 2019
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