Who is a Related Party When Doing a 1031 Exchange? In the context of 1031 exchanges, related parties refer to individuals or entities that have a certain relationship with the taxpayer involved in the exchange. The Internal Revenue Service (IRS) has specific rules and limitations regarding related parties in 1031 exchanges to prevent abuse and ensure that the exchange is conducted for legitimate business purposes. Currently, the IRS defines related parties in a 1031 exchange as: Family Members: This includes relationships such as siblings, spouses, ancestors (e.g., parents and grandpar ..read more

          Whitney Nash, Owner of Above & Below 1031, will be one of the panelists at WIMFA-Dallas's Meeting on October 3rd, 2023 ..read more

  1031 Exchange Same Taxpayer Rule Exceptions The "same taxpayer" rule for 1031 exchanges generally requires that the taxpayer who sells the relinquished property and the taxpayer who acquires the replacement property be the same. However, there are certain exceptions and nuances to this rule. Here are some important exceptions and considerations:   Single-Member LLC (SMLLC) and Disregarded Entities: If the taxpayer owns the relinquished property in their name (alone) and acquires the replacement property in the name of a single-member LLC (SMLLC) that is treated as a disregarded e ..read more

  Why might a DST be a good replacement property option for 1031 exchanges? Delaware Statutory Trusts (DSTs) have gained popularity as replacement property options in 1031 exchanges due to several advantages they offer. A 1031 exchange, also known as a like-kind exchange, allows real estate investors to defer capital gains taxes when they exchange one investment property for another of equal or greater value. DSTs can serve as attractive replacement properties for several reasons: Diversification: DSTs allow investors to diversify their investment across multiple properties within the tr ..read more

  How do you achieve full tax deferral with a 1031 exchange? To achieve full tax deferral with a 1031 exchange, you need to adhere to certain rules and requirements. Here are the key factors to consider: Like-Kind Property Requirement: The property you sell (relinquished property) and the property you acquire (replacement property) must both be of "like-kind." This means they should be of the same nature or character, typically referring to real estate for real estate. However, there is some flexibility within the definition of like-kind properties for real estate exchanges. Qualified Us ..read more

Why do you need to have an Exchange Agreement in place with a Qualified Intermediary to do a 1031 Exchange? Having an exchange agreement with a Qualified Intermediary (QI) is a requirement in the context of certain financial transactions, particularly in the United States, where it is commonly associated with a tax provision known as a "like-kind exchange" or a "1031 exchange." In a 1031 Exchange, a taxpayer can defer capital gains taxes on the sale of certain types of property by reinvesting the proceeds into a like-kind property. To successfully complete a 1031 exchange, the taxpayer must co ..read more

In the United States, a 1031 Exchange, also known as a Like-Kind Exchange, refers to a provision in the Internal Revenue Code (Section 1031) that allows individuals or businesses to defer capital gains tax on the exchange of certain types of property. When it comes to real property, the concept of "like-kind" refers to the nature or character of the property being exchanged rather than its specific grade or quality. For a property to qualify as Like-Kind in a 1031 exchange, both the relinquished property (the property being sold) and the replacement property (the property being acquired) must ..read more

Above & Below 1031 LLC facilitates as a Qualified Intermediary in a 1031 Exchange using the latest Rules & Qualifications.  For more information, please contact a 1031 Exchange Specialist ..read more

Above & Below 1031 LLC facilitates as a Qualified Intermediary in a 1031 Exchange using the latest Rules & Qualifications.  For more information, please contact a 1031 Exchange Specialist ..read more

Above & Below 1031 LLC facilitates as a Qualified Intermediary in a 1031 Exchange using the latest Rules & Qualifications.  For more information, please contact a 1031 Exchange Specialist ..read more