Is It Time To Cash In (Before the 2018 Bubble Bursts?)

Real estate investors try to look ahead. As we near the end of 2018, many are asking, “Is it time to cash in?” Several markets saw a healthy increase in prices over the last several years. If you were fortunate to buy property in the few years after the Great Recession, you may have a lot of equity that could be used to move up to the next level--especially if you take advantage of a 1031 exchange to defer your taxes.   
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​Organization structure in an exchange

Many investment advisors recommend that real estate investments be owned by Limited Liability Companies. This is to create an organization structure and to protect the investors from premises liability. The creation of a Limited Liability Company (LLC), with a separate tax ID number, is generally the creation of a partnership for income tax purposes. The LLC must file a partnership tax return. 
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Top 5 Answers About 1031 Exchange Rules in 2018

To the relief of many real estate investors, the recent tax reform left the 1031 exchange rules of IRS tax code Section 1031 essentially untouched. The tax reform did however limit the 1031 exchange rules to real estate, allowing you to still implement the benefits of a 1031 exchange as a real estate investor. Before we get started, let's review some basic 1031 exchange rules concepts: 
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1031 Exchange Aircraft (Updated 2018)

2018 Tax Reform limited 1031 Exchanges to Real Estate. This means that personal property aircraft, livestock, equipment, rolling stock and art are NO LONGER ELIGIBLE for exchange.  
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Equipment, Livestock and Aircraft Exchange

2018 Tax Reform limited 1031 Exchanges to Real Estate. This means that personal property aircraft, livestock, equipment, rolling stock and art are NO LONGER ELIGIBLE for exchange.  
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Understanding Reverse 1031 Exchanges - Do you qualify? (Updated July 2017)

How To Do a Reverse 1031 Exchange
A brief overview of the process of a reverse 1031 exchange

  1. You have a property you want to sell. This is Property A.
  2. Before you sell Property A, you find a new property you want, Property B. The IRS says that the taxpayer may not own both properties at the same time, if they want to do a 1031 exchange.
  3. An qualified intermediary, like 1031x, purchases and holds Property B until you sell the Property A.
  4. Once Property A is sold (within 180 days), Property B is transferred to you and the capital gains are deferred.
 
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