1031 Exchange
Named after a section of the US Tax code, 1031 holds that no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.
The tax is not eliminated; it is deferred…and deferred and deferred. “Swap till you drop.” Or beyond, if the title to the property is held in a trust.
What qualifies as “investment” can be very convoluted, so it is important to work with an attorney familiar with the provisions of the section. (There are some arcane definitions of investment personal property like art and very specific requirements for residential property you have either lived in or will live in.) You also need a “qualified intermediary” to receive the proceeds from the sale so that you don’t have constructive receipt which would trigger a taxable event. And timing is critical. There is a 45 day window to identify three potential “replacement “properties for the “relinquished” property and 180 to complete the transaction.
Gelco can provide you with current rates for any replacement property anywhere in the US. We can also, through trusted relationships, provide title costs and any property/casualty insurance costs. There is, as they say, no cost or obligation.
Gelco Real Estate Funding, Inc
155 West 68th Street, Suite 2010
New York, NY 10023
Tel: (212) 655-9534
Fax: (212) 537-6087
|
