Exchange Basics, Part 10

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The questions here were received from interested 1031 exchangers visiting my website. I have chosen to leave the questions intact with their ambiguity, shorthand writing and misspellings so as not to act on the assumption as to what when unclear the questioner meant.

Exchange Basics, Part 10

Take a look at today’s market, and you’ll see that it differs quite a bit from the traditional real estate world that existed decades ago. Nowadays, things are complicated, and 1031 exchange strategies are one of those things.

Since the main goal is to save money on taxes, part of understanding the 1031 exchange involves knowing the tax code and what’s possible according to IRS rules and regulations. That means understanding the principle of like kind for properties, timelines and more.

When you’re looking forward to successfully completing a legitimate 1031 real estate exchange, a qualified intermediary is a must. That’s another aspect of doing these sometimes complicated real estate deals.

Question:
My wife and I have owned 8 residential properties in Chesterfield county for many years, most of which are now free and clear. We are interested in exploring the possibility of doing some exchanges to relieve ourselves from the landlord concerns while avoiding taxes, etc. \n

Answer:
With eight residential properties, you can sell them one at a time as the tenants depart, and do eight or more exchanges, theoretically up to 24 using the straightforward three property identification rule. As with the DST, you can exchange into multiple asset classes anywhere in the U. S. where you can easily achieve diversification. The old adage “Don’t put all your eggs in one basket” still holds here, and before you first place a property for sale, learn the rules governing an exchange and the structure of the DST. The DST’s two most salient features are the need for a sponsor as the decision maker, and the designation of all debt as non-recourse.

About Marilee: Role of Marilee Hill, Registered Representative (RR)

Coming into the real estate business with experience in property management and leasing, Marilee Hill has been actively advising dealmakers on 1031 exchanges for years. As a FINRA certified real estate professional, she is knowledgeable in series 7 licensing and everything else that goes along with these sorts of real estate deals. When you need great information about qualifying intermediaries or anything else, come to Marilee Hill and let her help you to start the process and get all of your ducks in a row.

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Marilee Hill, MA Hill