Real Estate: 1031 Exchange?

Question

I have a real estate question related to a 1031 exchange that I am in the process of completing. Can the exchanged property be located in a different state?

I own property in california and wish take advantage of this law.

Also, can I apply the exchange for 4 units and upgrade to 20?

Will it still apply if it is not like property?

Thanks,

NJ

Answer 1

I am a Qualified Intermediary with First American Exchange Company. Let me help you out with these answers.

Yes, you can exchange property anywhere in the US for other "like kind" property anywhere in the US.

By doing a 1031 Exchange, you will also defer CAL FIRPTA.

You can exchange 4 units for 20 units, but to defer all taxes, your replacement property must be of equal or greater value than your relinquished property.

Lastly, like kind is defined as "property held for productive use in trade or business or for investment". Therefore, as long as you are selling investment property and purchasing investment property, you will satisfy the 1031 requirements.

Also, as previously stated, there have been some Qualified Intermediaries who have gone under recently. Be careful who you choose as an Accommodator. Make sure of the experience of your Accommodator and ask what their bonding limits are. Also, find out who guarantees their funds. If they have no parent company, be very cautious.

Email me at [e-mail] if you have further questions.

Answer 2

Dif state - OK
4 to 20 OK
"Like Property"? For the purose of 1031, "like property" means investment/rental to investment/rental.

Un-like property wouled be your rental units and the house you live in. If you sell investment property, you must buy investment property.

BTW - If you haven't already chosen your exchanger, make sure to get one that requires both yours and his signatures to move the money. Recently some investors lost millions of dollars to a company that was "investing" the held money, rather than just "holding" it. All the money got lost, the exchanger filed bankrupcy and the investors who sold their houses don't get their money or the chance to buy other houses. An investment group in San Antonio lost over 8 million $ in this fiasco.

Two signatures to move the money!

Answer 3

A 1031 substitute enables a house proprietor to sell one investment sources and purchase yet another devoid of recognizing capital constructive factors. A 1031 substitute could be dealt with via an suited middleman and could be finished in accordance to particular policies to qualify. You did not furnish added suggestion, yet frequently people are misinformed approximately their trip residences and the way they could qualify for 1031 exchanges. oftentimes, a sources could be considered investment sources (not a 2nd place of living) for no less than one twelve months formerly being considered for a 1031 substitute. After that, you are able to "substitute" your sources for yet another investment sources that would not even could be of an analogous type (i.e. residential condo for commercial workplace construction, etc.) Your substitute middleman will carry the money from the sale of your unique sources and direct you in the cut-off dates for the acquisition of your substitute sources. because of the fact the point of 1031 exchanges is to circumvent taxes, you won't have the ability to triumph over the IRS for a source...

Answer 4

Yes, as regards state.
Yes, as regards numberof units.
If it is a commercial property, it can be done, as long as the other property or asset is also commercial.

Feel free to contact Bayview Financial in New York or Sun1031 in Arizona.