Important 1031 Exchange Reminders
As we approach the end of 2024, now is the time to review some key 1031 Exchange points:
1031 Exchanges allow for tax deferral of federal capital gains, state taxes, recapture of depreciation, and the net investment income tax (part of the Affordable Care Act).
Section 1031 has been part of the tax code since 1921. It is not a loophole.
Any entity can do a 1031 Exchange. This means an individual seller, a trust, a partnership or LLC, or even corporations can conduct a 1031 Exchange.
Taxpayers wanting to do a 1031 Exchange must engage a Qualified Intermediary (QI), like Security 1st Exchange, before the sale closes. As a QI, we will prepare documentation for the exchange, hold the exchange funds securely, and coordinate with closing agents on the sale and purchase of property.
1031 Exchanges offer more than tax deferral. They can be used to increase cash flow, relocate an investment, diversify or consolidate portfolios, or to relocate an investment from one area to another.
A QI cannot provide specific tax advice. We can only inform taxpayers of the rules of a 1031 Exchange and how that may apply in your situation. For specific tax advice, please consult with a tax attorney or CPA.
Choose the right QI for you. Security 1st Exchange has extensive experience on the 1031 process. Our team has years of experience and are always here to answer your questions. One of our professionals is always ready to assist you - you call, we answer.
Our sole purpose is to help taxpayers through the 1031 process. To learn if a 1031 Exchange is right for you, reach out to our dedicated team at Security 1st Exchange.