The 1031 CE Course held at Suntree was a great opportunity for the attendees to learn ways to offer additional knowledge to investor clients!
In a nutshell the 1031 Exchange is a way for investors to defer taxes by swapping investment properties. This is not for homesteaded properties, flips or pre construction. The Concept is that investors will sell an investment and purchase new, replacement investment property. The replacement property can be all different types of investment properties. There are lots of options depending on the investment goals of the client. They can:
Sell One —- Buy One
Sell 4 —- Buy 1 Larger
Sell 1 Larger —– buy 4 Smaller … etc….
When an investor is selling an investment property, they may be a candidate for a 1031 Exchange. The replacement properties do not have to be purchased in a simultaneous closing. There are timeframes for the new investment to be purchased that must be met for the investor to defer the taxes. The key is that the investor can not “touch” the money betweeen the closings, so an intermediary is used to hold the money until the investor can close on the new property.
After closing on the first investment, the investor must idenify properties that they want to purchase to “swap” within 45 days ( of the closing) and they must close within 180 days (of the closing).
The objective is to identify a potentially positive situation for your client, and then have them consult their CPA as we all an intermediary.
If you have an investor that may be a candidate, The Private Exchange Group Inc is a great resource.
Drew Monaghan
info@peg1031.com
877-567-1031
Feel free to check out their presentation: PEG 1031 Exchange Presentation-2018
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