1031 exchange:
That Magic Time of Year
Exchanges begun after July 5th, that magic time of year, bring into play a little known tax regulation under Section 1031. This regulation allows you to defer tax liability for one year even though a 1031 exchange fails. The general rule is that a 1031x must be reported on the tax return for the year in which the relinquished property sells. Therefore, an exchange started in 2006 must be reported on a 2006 tax return.
There is one exception. An exchange started in 2006, (but not completed by the end of 2006) can be reported in 2007 if the exchange then fails. The gain can be reported in the tax year in which it failed (2007), rather than in the year it was begun (2006).
To reiterate, the gain from an exchange started in one calendar year and still open at the end of the tax year which then fails in the next tax year can be reported in the tax year in which the exchange fails instead of in the year in which the exchange was begun. This rule can allow an exchanger to defer tax liability for a full year even if a 1031x fails.
Latest News
One Spouse or Two How to handle how spouses hold property ...Read More
Extend 1031 Exchange Deadlines A strategy for extending your deadlines ...Read More
RELATED PARTY 1031 EXCHANGES FULL OF SUBTLETIES You need to understand this if you are thinking of ...Read More
Online help for completing IRS Form 8824 Now available--online system for completing your F ...Read More
Three Tax Strategies to Maximize Tax Savings Good strategies to keep in mind or pass on to your ...Read More
Toll Free: 1-888-899-1031
Latest Newsletters
Oil and Gas investors are exchanging into undervalued real estate... Read More
Freeing up cash before closing is often invaluable... Read More
Don't lose out on the opportunity to save thousands of dollars in taxes... Read More
Top 10 Ways to Legally Avoid Paying Taxes.
Sometimes our lamentable sense of humor gets the better of us... Read More
1031 Exchange Alternative: Oil and Gas Investments.
Certainly the most common exchange we facilitate is real estate for real estate. Did you know the definition of "real property" includes mineral/oil and gas rights? Read More
Category
- Cash from exchange!
- My state tax rate
- Tax Estimator
- 1031 Exchange Summary
- 1031 History
- FORM 8824 Help
- Client FAQs
- Newsletters
- Exchange Types
- Exchange Fees
- About Us
- Affiliate Program
- Join Our Network
- Newsletter Sign-up
- Contact Us
- Newest Pages
- Dual Use of Property
- Three Tax Strategies to Maximize Tax Savings
- Online help for completing IRS Form 8824
- Principal Residence Considerations
- Lease Options
- Accumulated Depreciation
- Taking Cash Out of a 1031 exchange
- More on Capital Gains
- Capital Gains Exclusion???
- Exchange Basics
- Increasing Basis
- Tax Free Cash
- Subdividing question
- 200 Percent Identification Rule
- How Often can I take Advantage of the Tax Exclusion Under IRC section 121?
- Capital Gains State Tax Rates
- RELATED PARTY 1031 EXCHANGES FULL OF SUBTLETIES
- Extend 1031 Exchange Deadlines
- One Spouse or Two
- Capital Gains Tax Example
- FunTaxGear.com
- Site Map
