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.
When you first hear about the 1031 exchange, a natural question is “What is a like kind property?” Some examples can help: in 1991, before Revenue Ruling 1992 -105, a client exchanging a $12,000,000 investment paid his expert real estate attorney $110,000 for research and an opinion supporting the client’s replacement property selection. In 2003 another client’s CPA informed the investor that the investor would have to buy a larger town house!! The legal fees for determining like kind have disappeared, and the CPA who was relying on outdated information was educated.
I have a farm in Iowa and am selling it and wish to exchange with a piece of property that has two rental income home and room for two more. Is this a like exchange?
Yes, in 1992 the IRS defined like kind to be real property to real property, regardless of each property’s asset class, i.e. land to houses, shopping centers, office parks, vice versa: plus, if in the state that they are located, timber, oil and gas rights, co-operatives , etc. are classified as real property, then the timber, etc. are real property for 1031 purposes.
Can you exchange an oil & gas investment for a real estate property?
Yes, you can also exchange timber, etc., as long as in the state located, oil/gas and timber, etc. are classified as real property.
About Marilee: Role of Marilee Hill, Registered Representative (RR)
Marilee Hill is a real estate professional with a wealth of experience. When she entered into the securitized 1031 exchange field in 1999, she already had extensive experience with office and retail sales and leasing, having owned and managed her own apartment buildings and understood DSTs (Delaware Statutory Trusts) and all the rest.
Marilee, who also acted as a real estate broker, understands the human side of the business, and the value of truthfulness and transparency. Marilee knows how to wheel and deal with sponsors, brokers and dealers. Her motto is: “My clients’ success is my success”.
Please contact Marilee Hill for your next 1031 Exchange strategy.