📢 How to Do a 1031 Exchange 🏢💼

📢 How to Do a 1031 Exchange 🏢💼

Bill Rapp, Commercial Mortgage Broker
July 22, 2024•2 min read

📢 How to Do a 1031 Exchange 🏢💼

Looking to reduce or eliminate taxes on the sale of business or investment real estate? A 1031 exchange might be your answer! By selling one property and purchasing a “like-kind” property within 180 days, you can avoid capital gains tax, depreciation recapture tax, and even sales tax. Let's dive into how it works and the benefits it offers. 🌟🔄 #TaxBenefits #RealEstate

The 1031 Forward Exchange Process 🏠➡️🏠

Forward exchanges are the most popular type of 1031 exchange due to their versatility, ease, and speed. Here's how it works:

1.     Sell Your Current Property: Sell your currently owned property (relinquished property).

2.     Buy a New Property: Purchase a new property (replacement property).

To get started, you'll need to work with a Qualified Intermediary (QI). Before selling your property, you'll enter an exchange agreement with the QI and set up a qualified escrow account at a secure bank. The sales proceeds go into this account, ensuring they're only used for the purchase of the replacement property. 🏦💸 #QualifiedIntermediary #Escrow

Key Timelines:

  • 45 Days: Identify a replacement property in writing or acquire one without written identification.

  • 180 Days: Complete the purchase of the replacement property from the date of the sale of the relinquished property.

The 1031 Reverse Exchange Process 🔄🏘️

Prefer to buy first and sell later? The 1031 reverse exchange offers the same tax benefits but with a twist. The IRS provides “safe harbors” for structuring these exchanges. There are two types:

1.     Exchange Last: The QI acquires title to the replacement property and “parks” it until you sell your relinquished property.

2.     Exchange First: The QI acquires title to the relinquished property and “parks” it until you acquire the replacement property.

Key Timelines:

  • 45 Days: After parking the replacement property, identify or sell your relinquished property.

  • 180 Days: From the parking of the replacement property, complete the sale of the relinquished property.

🏢💼 #1031Exchange #RealEstateInvestment

Need more help? I’m an experienced Commercial Real Estate Mortgage Broker, please feel free to reach me at 281-222-0433.

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© 2023-2024 Bill Rapp, Medallion Funds LLC, Director of Capital Advisory

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Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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