Exchanging Thoughts

The Interplay of 1031 and Personal Residence Sales

Posted by Paul G. Neiffer, CPA on Wed, Jul 15, 2020

Many investors sell investment property that includes their personal residence. We see this in many farm operations where the house is located on the farm. Also, many city dwellers recently converted their personal residence into a combination of rental property and their home.

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Topics: section 121 exclusion, section 1031, 1031 Exchange, personal residence, rental property

Seller Financing in a 1031 Exchange

Posted by Margo McDonnell on Wed, May 27, 2020

Sellers are sometimes asked to provide financing to the buyer of their property as part of the sale negotiations. Usually structured with payments spread out over a number of years, sellers can report the transaction as an installment sale under Section 453 of the tax code. The installment sale method would allow the seller to defer the gain over the life of the note. Taxes are paid based on the payments received each year and part of each payment is the return of your basis, part is your capital gain which will be taxed according to capital gains tax rates and the interest paid is treated as ordinary income.

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Topics: section 1031, 1031 Exchange, Seller Financing, Section 453, Installment Sale

CARES Act and Rev. Proc 2022-22 Usher in Much Needed Relief

Posted by Bruce Johnson, Capstan Tax Strategies on Mon, Apr 27, 2020

On Friday March 27th, the President signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law. This $2 trillion dollar stimulus bill will provide relief to individuals, businesses, and state and local governments, and will bolster an economy gravely shaken by the unprecedented impact of the Coronavirus.

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Topics: 1031 Exchange, CARES Act, Qualified Improvement Property, Tax Cuts & Jobs Act, Coronavirus Aid Relief, Taxes

Thankful for Your Advisors

Posted by Ellie Trovato on Thu, Jun 28, 2018

We recently purchased a new home and our real estate agent was a key part of the process. Whenever buying or selling a property, advisors such as your real estate agent and accountant are crucial. This Thankful Thursday, we discuss the role of your professional advisors and why they are an important part of your 1031 tax-deferred exchange.

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Topics: tax consequences of a 1031 exchange, 1031 exchange process, Qualified Intermediary (QI), 1031 Exchange

Making Your Home Work for You

Posted by Ellie Trovato on Wed, Jun 27, 2018

I recently purchased a new home and have started thinking about long-term investment goals including eventually converting my home into a rental property or even keeping it as a second home. There is another tax strategy that I could take advantage of down the road. Today’s Wealth Building Wednesday discusses the principal residence exclusion which allows homeowners to have a gain on the sale of their primary residence.

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Topics: 121 primary residence exclusion, capital gains, 1031 Exchange, 1031 Replacement property

Dig Below the Surface for More Like-Kind Options

Posted by Ellie Trovato on Mon, Jun 25, 2018

When Exchangers call our 1031 CORP. Exchange Team they often ask us what assets qualify as like-kind replacement property in a tax-deferred exchange. Rental units, office buildings, duplexes and warehouses are typically properties that come to mind. This More, More Monday addresses oil, gas and mineral rights, lesser-known assets that are growing in popularity among Exchangers.

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Topics: 1031 Exchange, Minerals, 1031 exchange of gas & oil royalties, GMO, Like-kind requirement

Time Extensions for Federally Declared Disasters

Posted by Ellie Trovato on Thu, May 31, 2018

With subtropical storm Alberto blasting the southeastern corner of the U.S and hurricane season right around the corner, it is important to know how Mother Nature’s unpredictability can affect your tax deferred exchange. Today’s Thankful Thursday addresses Section 17 of Revenue Procedure 2007-56 which provides extensions to exchange deadlines if you are affected by a federally declared disaster.

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Topics: 1031 Exchange, 45-Day Identification Period, identifying 1031 replacement property, Federally Declared Disasters, Rev Proc 2007-56

Step by Step, Keeping the Exchange Process Simple for You

Posted by Ellie Trovato on Fri, May 18, 2018

Every day we receive calls about how a 1031 tax-deferred exchange works and what steps are involved. On this Friday Free for All, I want to take a look at the exchange process and how simple it really is. In fact, it is simply the sale of business use or investment real property followed by the purchase of like-kind property linked together by paperwork.

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Topics: section 1031, 1031 exchange process, 1031 Exchange, 1031 like-kind property, tax-deferred exchanges

Personal Property Repealed from Section 1031….But Not Yet!

Posted by Margo McDonnell on Tue, Dec 26, 2017

After talking about it since before the 2016 elections, Congress passed the Republican tax reform bill, HR.1, the "Tax Cuts and Jobs Act" on Wednesday, December 20, 2017 and President Donald Trump signed the bill into law on December 22, 2017. The legislation will take effect January 1, 2018.

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Topics: personal property 1031 exchanges, personal property exchange, 1031 Exchange, 1031 Tax Updates, Tax Reform

With Patience, Vacation Home Owners Score Big with 1031 Exchanges

Posted by Margo McDonnell on Thu, Aug 09, 2012

Section 1031 exchanges are for properties held for investment or for use in a trade or business. Personal use properties do not qualify even though everyone would likely agree that virtually all real estate is acquired for future appreciation. Under Section 121, home owners can qualify for a $250,000 ($500,000, if married filing jointly) exclusion when selling property used as their primary residence for at least 24 of the last 60 months. Unfortunately, for vacation home owners, there is no easy way out unless you have time and patience to implement a plan.

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Topics: 1031 Exchange, vacation home exchanges, Rev Proc 2008-16