A 1031 exchange is not an exchange in the barter sense. It involves simply the sale of a property and the purchase of another property under certain guidelines. The result is the indefinite deferral of capital gains taxes on the sale. Specific guidelines for an exchange are summarized on our web site on the pages titled “Property that Qualifies”, and “Replacement Property Criteria.”
EXCHANGE TYPES:
1. DELAYED EXCHANGE (often referred to as “Starker Exchange”) was codified in the 1984 Tax Reform Act; and it is by far the most common type of exchange. After the closing on the sale of your property you have 45 days in which to identify replacement property (or properties), and 180 days in which to close on the purchase of the replacement property.
2. REVERSE EXCHANGE is simply the reverse of a delayed exchange. This occurs when an investor identifies and purchases replacement property prior to the sale of property he relinquishes. Federal guidelines for a reverse exchange were issued September 15, 2000 so we have safe harbor rules to follow.
3. AN IMPROVEMENT EXCHANGE allows the investor to construct a new replacement property within certain guidelines including time constraints.
Qualified Intermediary (Facilitator)
In order to properly complete a 1031 exchange and defer capital gains tax, the proceeds from the sale of your property must be kept by a “Qualified Intermediary” until it is used for the purchase of a replacement property. We can assist you in finding a Qualified Intermediary to help facilitate the exchange.
1031 EXCHANGE EXPLAINED
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PROPERTY THAT QUALIFIES
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REPLACEMENT PROPERTY CRITERIA
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TAX SAVINGS AND ECONOMIC BENEFITS
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ADVANTAGES OF EXCHANGE
SECURITIES OFFERED THROUGH Concorde Investment Services, LLC, a member of FINRA/SIPC. 1031TaxSavings.com and its parent company Capstone Financial Services, LLC are independent and not affiliates of Concorde Investment Services, LLC.
OSJ: 1120 E. Long Lake Road, Ste. 250, Troy, MI 48085 - 248.824.6710
This site has been prepared for informational purposes only and does not constitute an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investment strategy. Such offers may only be made by written prospectus and only in a jurisdiction where the security is duly registered or exempt from registration therein. The information contained herein was current as of publication but is subject to change without notice. The information contained herein was obtained from sources believed to be reliable; however, we make no guarantee regarding its accuracy or completeness. Furthermore, due consideration should be given to risks associated with real estate ownership such as market, interest rate, and default risks.
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