1031 Exchange

1031 Exchange - A 1031 exchange is a vehicle that allows investors to avoid paying capital gains tax on the appreciation of a property when they sell. While you can avoid the taxes, there are certain things that you must do in order to stay within the guidelines of a 1031 exchange.

Please remember the all of the profit from the sale must stay in escrow till you re-invest in your new property, if the money is pulled out of escrow for any reason you may lose your 1031 Exchange.

When contemplating selling any of your properties, before you list for sale or entertain a sales offer, please consult your CPA for advice and counseling on your transaction. The decisions you make regarding the sale of your property could cost you or save you thousands of dollars.

Taxes are not actually avoided completely, but are deferred.

Your adjusted cost basis in one property is transferred to your new acquisition. There are requirements regarding debt and purchase price etc.

Check the IRS guidelines if involving a client in them. You MUST use a 3rd party accommodator, and exchanger cannot have access to the funds.
The amount of time to identify and close the new transaction is very specific. Be careful!

For more information regarding this topic, please call Mike Williams at 516-921-9000 or email mwilliams@northshorefunding.com.