1031 exchanges and refinancing ?

Question

Can I buy a property with a 1031 exchange then immediately refi the property to get my cash back out and still defer tax?

Answer 1

Yes, you can that is a exactly what I do.You will not have to pay Capitol Gains on a refi.

Good Luck
Real Estate Investor

Answer 2

Hello -

Yes you can buy a property and defer taxes, but are you aware of the guidelines?

Your residence is not eligible for 1031 treatment. Any other property that is not held for commercial, business, or investment purposes is also not eligible.

Section 1031 applies to capital gains taxes (15%), depreciation recapture (25%), and state income taxes (generally 8% to 9% where applicable). Long-term capital gains taxes apply to property held over 1 year – gains from property held less than a year are typically taxed as ordinary income.

You must contact a Qualified Intermediary before you sell your property, so that you can complete the appropriate documentation and structure the exchange.

Using a Qualified Intermediary is the most common way to receive ‘safe harbor’ protection for your 1031 Exchange.

A Qualified Intermediary must remain completely independent and cannot have been your agent in the past 2 years.

You have 45 days from the sale of your relinquished property to identify your potential replacement properties.

You have 180 days from the sale of your relinquished property by which you must close on the purchase of your replacement property/properties.

There are stirct guidelines on 45th or 180th day.

As a general principle, there are no extensions for either the 45- or the 180-day rules. However, the IRS has the authority to provide an extension to these deadlines. Recent examples of such extensions include the terrorist attacks of September 11, 2001 and recent hurricanes.

You may identify property in the following ways:

• 3-property rule: You may identify up to 3 properties without regard to their value.

• 200% rule: You may identify more than 3 properties provided that their combined fair market value does not exceed 200% of value of the relinquished property.

• 95% rule: You may identify any number of properties, provided that you acquire 95% of the fair market value of those properties.

In order to completely defer the applicable capital gains tax. To the extent you purchase a property of lesser value, you will be taxed on the difference.

You must use all cash proceeds from the transaction in order to completely defer the applicable capital gains tax. To the extent you do not use all your proceeds on the purchase, you will be responsible for any tax on the difference.

Answer 3

Yes, I just helped a couple sell and refi there rental property. If your looking to do the same and in California, give me a call 909-489-4692, Frank

Answer 4

1031 is a TAX deferred substitute. no longer tax loose! do not get all of it mixed up, maximum individuals imagine it is tax loose! besides the undeniable fact that, it should be an alike sources. in case you promote and purchase, you is genuinely no longer waiting to defer any tax for the sources you offered. because you're paying a low pastime personal loan, take a at the same time as to imagine about how a lot on pastime you'd be figuring out to purchase the recent sources. and how a lot will you be making grossly from renting out the multi-living residential contraptions. i'd seek for suggestion from a 1031 substitute professional or a broking service who knows what he or she is doing. 1031 substitute isn't dealt with by all genuine sources broking service, so make certain you refer to the professional.

Answer 5

Yes.
First sell your current proptery.
Buy another for cash. Then take out a mortgage for your cash.