Etessami Properties offers comprehensive 1031 exchange services to help you defer capital gains taxes. Additionally Enhance your investment strategy and maximize your investment potential.
This is where the investor sells the relinquished property. The exchanger should have a licensed accountant So that Etessami Properties can advise him during this process
The proceeds from this sale are held by a qualified intermediary (QI) rather than being given directly to the seller to ensure the exchange remains compliant with Section 1031 of the IRS
The investor will have 45 days to identify up to three like-kind replacement properties to purchase. Typically you want the size of the identified properties to exceed the price of the relinquished property.
The exchanger acquires the “replacement” property within 180 days from the sale of the relinquished property using the funds held by the QI, and the guidance of Etessami Properties
Your qualified intermediary (QI) and tax advisor must report the exchange on your tax return for the year in which you sold your down leg relinquished property.
A tax-deferred strategy allowing investors to sell a property and reinvest the proceeds in a new property while deferring all capital gains taxes
A depreciation method that allows you to deduct a greater portion of the cost of depreciable property in the first years after the property is placed in service, rather than spreading the cost evenly over the life of the asset, as with the straight-line depreciation method.
The original cost of the property plus any capital improvements or subtracted depreciation, used to calculate capital gains tax liability.
A balanced exchange ensures that the taxpayer defers 100% of his or her taxes on capital gain and depreciation recapture. To achieve a balanced exchange 1) acquire a replacement property that is equal to or greater than the relinquished property; 2) reinvest all of the net equity from the relinquished property in the replacement property; and 3) assume debt on the replacement property that is equal to or greater than the debt on the replacement property or contribute cash to make up the deficiency. (See Partial Tax Deferment; Boot; and Mortgage Boot/Relief.)
An offer to purchase the relinquished property during the exchange process. Accepting such an offer may impact the ability to complete the exchange.
Any form of cash thats recieved without reinvesment. An example is if an investor sells a property for $500,000 and buys a replacement property for $450,000, the $50,000 difference is considered boot.and subject to capital gains tax.
Tax levied by Federal and state governments on the profit of investments. (Real estate is the only investment that can be exchanged)
The most common type of 1031 exchange, where the sale of the relinquished property and the acquisition of the replacement property occur on different dates within the exchange period pursuant to Section 1031 of the Internal Revenue Code and Section 1.1031 of the Treasury Regulations in order to defer Federal, and in most cases state, capital gain and depreciation recapture taxes.
An entity that holds legal title to the replacement property during a reverse exchange, allowing the investor to first acquire the replacement property and then relinquish their current property.
The time frame in which the investor must identify potential replacement properties (45 days) and complete the exchange by acquiring one or more of those identified properties (180 days).
The initial 45-day period during which the investor must identify potential replacement properties. This period begins on the date of closing the relinquished property.
Property that is of the same nature, character, or class as the property being exchanged, regardless of the differences in quality or improvement.
When you assume debt on your replacement property that is less than the debt on your relinquished property, you receive mortgage boot or mortgage relief. The reduction in the mortgage on the replacement property is less than the mortgage on the relinquished property.
A tax that is owed by the taxpayer, of which part of the tax is paid to the IRS when taxes are due. The remaining tax is postponed to a time when a new taxable event occurs.
An independent third party that facilitates the 1031 exchange process by holding the proceeds from the sale of the relinquished property and using them to acquire the replacement property.
The requirement that both the relinquished and replacement properties in a 1031 exchange must be used for investment or business purposes.
The original property the investor intends to sell as part of a 1031 exchange.
The property the investor acquires in exchange for the relinquished property as part of a 1031 exchange.
A type of 1031 exchange in which the investor acquires the replacement property first before selling the relinquished property on a later date.