Mastering the Basics of Real Property and Like-Kind Property

Navigating the world of real estate investments can be complex, especially when dealing with tax deferral strategies like 1031 exchanges. Named after Section 1031 of the Internal Revenue Service’s (IRS) tax code, a 1031 exchange allows investors to defer capital gains taxes on the sale of their property, provided they reinvest the proceeds into another […]

When to Start Preparing for a 1031 Exchange

A 1031 exchange, named after Section 1031 of the Internal Revenue Service’s tax code, allows investors to defer capital gains on selling their property as long as they comply with the applicable rules and regulations of Section 1031.  By reinvesting the proceeds into a new, like-kind property and complying with a myriad of other IRS […]

Why Early Involvement of a Qualified Intermediary is Crucial for Successful 1031 Exchanges

The 1031 exchange is a powerful tool for real estate investors, allowing them to defer taxes and unlock capital after they sell an investment property. However, successfully navigating this process relies on adherence to IRS regulations. The so-called “safe harbor” rules, which, if followed, will protect an investor from tax penalties, mandate the involvement of […]

Navigating Exchange Pitfalls: 6 Mistakes to Avoid in Your 1031 Exchange

If you invest in real estate or work with those who do, it’s not an exaggeration to say that understanding how the government supports (or inhibits) real estate investments is crucial. You will never have a more powerful ally or adversary than the IRS, the US Treasury Department, and state Departments of Revenue. The most […]

Like Kind Exchange — Examples of “Boot”

What Is “Boot”? “Boot” is old financial parlance that means “value given in addition to.” In a 1031 Exchange, “boot” is anything received by the taxpayer that is not like-kind property. The IRS taxes the value of boot items. You won’t find the term “boot” in the Internal Revenue Code. And it does not appear […]