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.
Timing, Part 4
Quickly, here’s some of the good and bad on 1031 exchanges. As far as limitations, there is a mandatory 45 day identification, and 135 days plus for settlement. That starts as soon as you get rid of your initial property, and it’s a hard and fast rule.
On the other hand, you can write a contract anytime before settlement for a replacement property. That means if you handle this correctly, you’ll be ahead of the game when it’s necessary. However, if you waffle around, you’re likely to get in trouble.
A 1031 real estate exchange deal relies on multiple stakeholders. It requires a detailed process. Having good professional assistance is key.
Question 1:
How long do we have to turn around our sale money so as not to pay taxes. I am unable to talk on the phone\nI have no voice due to cancer. Please e-mail me.
Answer:
The replacement property must be held for two years. The property needs to be viably utilized during the two years — as in rented or trying to rent or fixing up to rent. That’s the necessaries. On your tax return you need to fill out Form 8824.
About Marilee: Role of Marilee Hill, Registered Representative (RR)
Want a registered representative with a series 7 license and knowledge of reg D of the security act of 1933? Marilee Hill provides exceptional free advice on 1031 exchange deals as a former real estate broker with 20 years in the industry. She knows about the people side of the business as well as the timeline, IRS regulations and relevant technical details. Come to Marilee Hill to help you with an existing 1031exchange plan when you have to get all your ducks in a row before you head toward settlement.
