1031 Exchanges

1031 Exchanges 1500 844 BERNSTEIN FINANCIAL SERVICES 2019

A commonly used technique for deferring gain from one investment property to another is utilizing the code section known as 1031.  This code section allows owners of an investment property (rental property) to sell the property and defer the gain to another “like kind” property.

There are a few important conditions, like identifying like kind property within 45 days of closing on the original property and closing on the new property within 180 days.  Also, an Accomadator must be utilized for this type of transaction.

The title before the exchange must be the same as the title after the exchange.  This can be tricky when the title holder is, for example, an LLC partnership.  In this case, the partnership must do the exchange, which does not allow each of the individual investors in the LLC partnership to make independent decisions on whether they want to participate in the exchange.  This problem can be sidestepped, but a plan must be set in motion early.

There is a lot more to these 1031 exchange rules, and Bernstein Financial is ready to help guide you through the process.