1031 Tax Deferred Exchange
What is a 1031 Tax Exchange?
A 1031 tax deferred exchange gives investment property owners the option to sell a property and buy a like-kind property while deferring capital gains tax on the sale.
Understanding 1031’s
1031’s are also known as a tax-deferred exchange or a like-kind exchange
Need a little more information? Check out re-viv’s Principal, Matt Ryan talking on the subject in the video below.
1031’s are also known as a tax-deferred exchange or a like-kind exchange
Understanding 1031’s
A 1031 exchange is a real estate transaction where a taxpayer can sell an asset to a buyer and acquire a replacement asset from a seller, deferring taxes on the gains that would otherwise be payable upon completion of the sale.
To qualify as a valid 1031, the relinquished property and replacement property need to be like-kind in nature. For instance, a single-family home is like-kind to a multi-unit apartment or a vacant lot.
1031 Exchange FAQ
Any real property held for productive use, such as a retail business or multifamily building, can be exchanged for like-kind property. The term “like-kind” does not refer to the form of the investment, rather, it refers to the nature of the investment. Without exception, any type of investment property can be exchanged for another type of investment property.
Starting from when the sale of the relinquished property closes, the investor has 45 days to nominate a potential replacement property or properties (up to three). They then have a total of 180 days from the closing date to acquire one of the three identified replacement properties.
As the party exchanging properties, you must provide an unambiguous description of the potential replacement property. This must take place on or before the 45th day after closing on the relinquished property, whether it be a property address or legal description of the property.
Source: IRS Opportunity Zone rules
DISCLOSURE: The above information should not be construed as tax advice. No warranty is made that an investment in re-viv’s OZ Fund 2 will qualify as an eligible investment in an Opportunity Zone fund or that any individual investor will realize the potential tax advantages described above. Investors should consult with their own legal and financial professionals to understand the potential tax implications and benefits of an investment in re-viv OZ Fund 2.
Source: IRS Opportunity Zone rules
DISCLOSURE: The above information should not be construed as tax advice. No warranty is made that an investment in re-viv’s OZ Fund 2 will qualify as an eligible investment in an Opportunity Zone fund or that any individual investor will realize the potential tax advantages described above. Investors should consult with their own legal and financial professionals to understand the potential tax implications and benefits of an investment in re-viv OZ Fund 2.
1031 Exchange vs. Opportunity Zones Compared
1031 exchanges and Opportunity Zone real estate investments each have unique tax advantages that can shelter and grow your wealth. Is one or both right for your portfolio?
We can guide you through a 1031 Exchange. Let’s discuss your needs and opportunities.