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By Priya Raman
Seven explainers on how a 1031 exchange actually works, what the IRS requires, and the cases where paying the tax now beats deferring it.
Seven explainers on how a 1031 exchange actually works, what the IRS requires, and the cases where paying the tax now beats deferring it.
A 1031 exchange lets you sell investment real estate and defer capital gains tax by reinvesting in like-kind property. What qualifies, how the deferral is structured, and what the numbers actually look like.
Read →From the day you close on your sale, you have 45 days to identify a replacement and 180 days to close on it. Miss either by one day and the gain is fully taxable. How the deadlines work, with no grace periods.
Read →Both properties must be held for investment, the replacement value must equal or exceed what you sold, and a qualified intermediary must hold the proceeds throughout. Every requirement, in one place.
Read →A 1031 exchange defers capital gains and depreciation recapture by directing sale proceeds, through a qualified intermediary, into a replacement property. The step-by-step mechanics and the math behind it.
Read →A qualified intermediary holds your sale proceeds so you never take constructive receipt of the cash. Without one in place before closing, the exchange cannot exist. What a QI does and how to choose one.
Read →A 1031 exchange keeps the deferred tax compounding in your next property. Paying capital gains now frees the cash for anything. Which choice wins depends on what you do next, and for how long. How to compare both with your actual numbers.
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