We are often asked if a client who is doing an exchange can offer seller financing to the buyer, and still take advantage of the benefits of doing a 1031 exchange. Should you decide to do seller financing with your relinquished property, it is important to note that the loan must be paid off prior [...]
When someone hears 1031 exchange, they think real estate, but 1031 is incredibly diverse and flexible with a little planning. One sector of 1031 exchange that has really taken off is GOLD. Yes, you can exchange gold for other gold. Why exchange gold? If it is done properly, you avoid all the taxable gains on [...]
Section 1031 is a valuable tax tool for the real estate investor’s toolbox. Prior to recent rulings, an investor could purchase an investment property, rent it out for a few years, and then convert the property to their primary home. Should they decide to sell it after the 5 year minimum holding period, they could [...]
Until recent rulings, it has been difficult to determine what the IRS expects when it comes to Vacation homes and how they are treated in the context of the 1031 exchange. Thanks to Revenue Procedure 2008-16 and Moore v. Commissioner, we now have clear guidelines as what would qualify and what would not. In order [...]
The Pension Protection Act of 2006 permits individuals to distribute up to $100,000 directly from an IRA to a qualifying charity without having to recognize the taxable implications of the distribution. - Who is eligible for a QCD? A qualified charitable distribution is eligible from any traditional IRA as long as the individual account owner [...]
Under the current law, a reverse 1031 exchange can be accomplished by following Revenue Procedure 2000-37. Under this technique, the Exchangor or Client typically purchases their replacement property before they have secured a buyer for their exiting property, and parks title to the replacement property with an Exchange Accommodation Titleholder (EAT). Most Qualified Intermediaries also [...]
Recently, many of the transactions on the Islands have involved seasoned Sanibel investors that have had a property for many years. Most of these investors decided it was time to upgrade via a 1031 exchange. The transactions were performed by a seller that wanted to upgrade from a two bedroom to a three bedroom unit, [...]
Whenever I tell someone that we are a Qualified Intermediary for 1031 Exchanges, I almost always get the response “1031?! Are people still doing those? I didn’t think those were still being done in this economy.”
Answer: Timing is everything!
The short answer to this question is yes, BUT you need to make sure that you treat the property as investment property first before you even think about converting it to your primary home.