The Woodlands Real Estate

Misconception #5: I don’t need a qualified intermediary.  My attorney or accountant can hold the sale proceeds until the replacement property is purchased. A qualified intermediary is not necessary. A qualified intermediary is essential to completing a valid delayed exchange.  Basically, the IRS disqualifies any person or entity from acting as an intermediary if that individual has had an [...]

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1031 Exchange Misconception #4: Taxpayers must use all the proceeds from the sale of their relinquished property to purchase replacement property. In order to have a completely tax-deferred exchange a taxpayer must: 1.  Buy a replacement property with a value equal to or greater than the value of the original relinquished property 2. Use the original equity realized [...]

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Misconception #3: Taxpayers must complete the 1031 exchange in one completely simultaneous transaction. As long as the investor purchases a replacement property within 180 days of selling off the relinquished property, the investor has the ability to complete the exchange on a “delayed” timetable. This delay is thanks to a favorable ruling to the taxpayer in [...]

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Any Real Estate property owner or investor of Real Estate, should consider a 1031 exchange when expecting to acquire a replacement  property subsequent to the sale of his existing investment property. If a 1031 exchange is not used, you will be paying a capital gain tax, which can exceed 20-30%, depending on the federal and state tax [...]

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Question: What is a 1031 exchange? Typically, when a property owner realizes a gain from the sales transaction of his property, he is taxed on the gain. However, section 1031 of the Internal Revenue Code provides a way to defer the tax on the gain until some future date. The 1031 Exchange provides that no gain [...]

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