1031 Like-kind Exchange Extension Deadline In Response to COVID19

Posted by Kathryn Vallee on Friday, April 10th, 2020 at 5:57am.

BREAKING NEWS

APRIL 2020

The Internal Revenue Service just released the new guidelines and extension date of July 15, 2020, for 1031 Exchange like-kind property as any held for investment, trade, or business purposes under Section 1031. In a 1031 Exchange, under the Internal Revenue Code Section 1031, if you make a like-kind exchange, you are not required to recognize a gain or loss. In the event, you receive other (not like-kind) property or money, you must recognize a gain to the extent of the other property and money received. The rule stipulates that you cannot recognize the loss.

A popular process used by many investors to defer paying a tax gain. We may see more 1031 Exchanges in 2020 due to the increased equity gains that we have seen in the past 8 years. Many investors will cash out of more expensive properties in seek of a real estate market that offers a better cash flow opportunity. Shifting the focus of their investment without triggering a tax liability is a smart game plan. Shifting out your investment from a high maintenance property into a newer property with less maintenance can be beneficial. You swap one property for another.

It is imperative that you understand the rules of engagement prior to selling a property under section 1031. A property under a 1031 exchange portfolio has limitations for personal use. Four types of exchanges; simultaneous, delayed, reverse, and contraction or improvement. In addition, there are several rules and guidelines to follow in a timely manner. The complexity of a 1031 Exchange requires professional guidance in order not to jeopardize the deferment of your capital gains taxes. Forbes has written a really great article that further explains the details for a 1031 exchange. 

For more information, Contact Michael Anderson, President, Zions Bank subsidiary Exchange Services, LLC. He is fantastic and will help you keep wealth when changing real estate investments.

 

 

 

 

 

 

Did you know? 

We offer far more than just a pretty Park City real estate website! We can provide you COMPLETE market evaluations for your home, take you on a VIRTUAL walkthrough of any property, and even offer assistance with special circumstances (divorce, estates & probate, 1031 tax exchanges, trusts and other more complicated real estate transactions) where needed. We have the experience to make your real estate vision a reality. Call us today for a consultation. We are happy to assist you!

 

How Much is Your Home Worth??

Whether you are thinking of selling now or some point in the future, you can ALWAYS check your homes value with us! We prepare a professional market analysis with no cost or obligation to any home or condo owner in the Park City area. Automated Valuation tools are notoriously innaccurate in our area. Let us provide you with the information you need!

FIND OUT NOW

Leave a Comment

Format example: you@domain.com
Format example: yourwebsitename.com