Experts urging public to voice their support to congressmembers for 1031 exchanges and the vital role they have in fostering economic growth and stability. As the Biden administration’s FY 2025 Budget proposal threatens to impose hard limits on IRC Section 1031 like-kind exchanges, experts at Peak 1031 Exchange are advocating for their preservation. These proposed limits have sparked concerns across various sectors of the economy, prompting experts to urge the public to voice their support for this essential provision. “1031 exchanges are more than just a financial mechanism; they are a vital ..read more

To ensure the integrity of 1031 exchanges, there are strict rules and restrictions in place, including the crucial “(G)(6) restrictions” outlined in the U.S. Treasury Regulations. The (G)(6) restrictions, delineated in Section 1.1031(k)-1(g)(6) of the Treasury Regulations, impose essential limitations on taxpayers’ access to exchange funds during the exchange period. These restrictions are fundamentally aimed at preventing taxpayers from receiving, pledging, borrowing, or otherwise accessing the benefits of money or other property before the end of the 180-day exchange period. Key Conditions o ..read more

An important issue when addressing partnership exchanges is the investment objective of the various partners. When all of the partners want to exchange, it’s easy to structure an exchange under Section 1031. It is, however, more difficult when partners have different investment objectives. Under IRC §1031(a)(2)(D), the IRS expressly prohibits the exchange of partnership interests in a 1031 exchange transaction. A commonly asked question we receive is, “How can individuals who hold title in a partnership go their separate ways?” Some may want to cash out; others may want to continue down the 10 ..read more

With high tax rates and even higher home prices, savvy property owners recognize California as the prime location for 1031 exchanges. There are however many rules and regulations to understand and it is imperative that you receive guidance from a competent and highly respected Qualified Intermediary to ensure full compliance with IRC Section 1031. Inside1031.com recently completed a thorough audit of California 1031 exchange companies and Peak 1031 Exchange is proud to have been hand-picked as one of the best in the State. “Peak 1031 (Exchange) has decades of experience and most of their team ..read more

A reverse 1031 exchange is a strategic real estate transaction that allows investors to acquire a replacement property before selling their relinquished property, effectively reversing the standard order of a 1031 exchange. This article dives deep into the often-overlooked strategy of reverse 1031 exchanges, shedding light on their mechanics and their remarkable benefits. Mechanics of the Reverse 1031 Exchange The mechanics of a reverse 1031 exchange involve a carefully orchestrated series of steps. First, the investor identifies a suitable replacement property and engages an Exchange Accommod ..read more

Real estate investors are well-versed in the advantages and disadvantages of 1031 exchanges. While the benefits of deferring taxes on gains and depreciation recapture are widely known, effectively managing depreciation within the exchange can be intricate. Nonetheless, navigating through the administrative complexities can lead individuals to optimize their depreciation strategies, thereby enhancing their free cash flow. This article delves into comprehending real estate cost basis in 1031 exchanges, strategies for depreciating real estate post-exchange, and selecting the most suitable depreci ..read more

Navigating the intricacies of a 1031 exchange that spans across two tax years requires a nuanced understanding of regulations and strategic planning. Here’s a comprehensive guide on handling incomplete exchanges and managing cash “boot” for maximum tax benefits. Installment Sale Treatment An exchange initiated towards the end of a tax year often extends into the subsequent year. Regulations outline how to manage incomplete exchanges and the cash “boot” received in the following year by the taxpayer. According to regulations, exchange proceeds held by a qualified intermediary can qualify for in ..read more

In the realm of property ownership, Section 1033 takes center stage, particularly in situations involving the involuntary conversion of property. This scenario often unfolds when the government exercises its powers of eminent domain, a process where private property is taken for public use, typically with compensation to the owner. Property owners, however, find themselves navigating a complex landscape when their property faces the imminent threat of condemnation. Navigating Eminent Domain and Capital Gains Tax Implications The specter of eminent domain not only raises concerns about property ..read more

A reverse 1031 exchange is a strategic real estate transaction that allows investors to acquire a replacement property before selling their relinquished property, effectively reversing the standard order of a 1031 exchange. This article dives deep into the often-overlooked strategy of reverse 1031 exchanges, shedding light on their mechanics and their remarkable benefits. Mechanics of the Reverse 1031 Exchange The mechanics of a reverse 1031 exchange involve a carefully orchestrated series of steps. First, the investor identifies a suitable replacement property and engages an Exchange Accommod ..read more

Like-Kind Exchange Within the United States Under IRC §1031, U.S. taxpayers can freely exchange investment properties within the 50 states and the District of Columbia. This means that a property owner in California can trade their property for a similar one in New York without triggering capital gains tax. This rule provides a significant advantage for investors looking to adjust their real estate holdings to better align with their financial goals. The Intricacies of Foreign Real Property However, when it comes to foreign real property, the rules are not as straightforward. Foreign real prop ..read more