If you were to scrape off the outer covering of an electrical cord to your TV set, you would find a number of intertwined electrical wires. You, the owner of the TV set and its attached electrical cord, would own all of the intertwined electrical wires in that electrical cord. When one owns real estate, they own a number of rights.
I.R.C. Section 1031Tax Deferred-Exchanges allows the taxpayer to sell (relinquish) its investment real estate and defer paying the capital gains taxes (and other taxes) on their profits when they reinvest the proceeds into other investment Replacement Property(ies).
Parts One and Part Two of this missive will discuss some of the advantages and disadvantages of Delaware Statutory Trusts (DSTs).
Most of you are aware that the taxpayer/exchanger has 45 days from the day of closing, the day of closing being the first day, to identify possible Replacement Properties when using a 1031 Exchange transaction to defer taxes.
There are a number of “exchange expenses” that will reduce the realized gain and recognized gain on a Section 1031 Exchange.
On November 23, 2020, the IRS issued the final regulations defining real property for Section 1031 Exchange purposes. Read on to learn how the IRS significantly expanded the definition of real property.
At least once a week I get asked: What are the benefits of doing a Section 1031 Exchange? I normally give the usual answer: Deferral of Taxes resulting in more funds to spend on possible Replacement Properties.
What happens if two or more taxpayers own property together, as tenants in common, and decide that they want to go their separate ways?
What happens to the 1031 Exchange validity when a transactional mistake causes a violation of IRS 1031 Exchange rules?