Tom Gustafson

Commercial Property 1031 Exchange

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This 1031 exchange was for two commercial properties with closings four days apart. The commercial broker called to introduce the client stating the turn around on the replacement property will be quick. In 1031 exchanges with property closings within five calendar days of each other, escrow instructions will request the “net equity” be wired from one closing to the next without going through an escrow or bank account. A formal property identification was not required because the replacement property was acquired within the first forty five days post closing on the relinquished property. The commercial property exchange went smoothly and the capital gain was successfully deferred.

Testimonial

“The 1031 exchange was a win-win. The value of the service was excellent from the initial contact to the final exchange interview. Andy knows what he is doing and has my full confidence to handle our client’s 1031 exchange requirements. He stays current on 1031 tax law changes. Marian McBryde, the Closing Manager at the Dowd Law Firm for this transaction also remarked how easy it is to work with Andy and refers him to their clients. Andy is the go to guy for 1031 exchanges.”

Craig Barrett
CEO
NBI Properties, Inc.
Fort Walton Beach, Florida

 

CPA Response to 1031 Exchange

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At the completion of each 1031 exchange, a summary file is forwarded to the Exchangor and designated CPA if requested. The intent is to provide executed 1031 exchange documents including settlement statements and property identification letter to assist with the completion of Internal Revenue Service Form 8824 used to itemize the 1031 exchange details. It is a value add service provided over the years, verifying the intent and facts supporting the intent to affect a 1031 exchange in accordance with the Internal Revenue Service Code 1.1031 exchange rules.

Testimonial

Here is an email received from an Exchangor’s CPA:

“Andy,

I see you are also working late; thank you for such a prompt response.

I have prepared returns for 35 years and have reported numerous 1031 Exchange transactions and have worked with a variety of qualified intermediaries, but I must admit that I don’t recall ever working with one as thorough and helpful as you have been. I would definitely not hesitate to refer someone to you when the occasion arises.

Thanks again,

Allen”

C. Allen Anderson & Associates, P.C.
C. Allen Anderson, CPA
Franklin, Indiana

 

Ask The 1031 Expert Response Quality

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Michael submitted a question through the Ask The 1031 Expert feature on the Atlas 1031 web site. The question centered upon whether the sale of rental property owned in Australia could defer capital gains in a 1031 exchange by purchasing replacement property in the United States. The Omnibus Budget Reconciliation Act of 1989 added subsection (h)(1) of Section 1031 stating that real property located in the United States and real property located outside the United State are not property of like kind.

Within six minutes of submitting the question, our Certified Exchange Specialist® called Michael to listen and respond to his questions. An estimated capital gain tax was calculated along with a suggestion to confirm with his CPA whether Australian capital gains will offset US capital gains.

Testimonial

“Andy, you and your firm are awesome. I did not expect that somebody would call me and explain 1031 exchanges in the detail and that is without any charge. I really appreciate your help and guidance. In the future, if I need the service, you will be the first person I will call and I will not hesitate to refer you to any of my friends and family. Thanks once again.”

Michael Patel
Raleigh, North Carolina

 

FIRPTA Forward 1031 Exchange

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A title company I have known and facilitated 1031 exchanges for over the years in the Florida Panhandle called to introduce one of their clients. Karen’s 1031 forward exchange was a bit unique in that she is a resident of New Zealand requiring additional Internal Revenue Service filings. The forward 1031 exchange accommodated a vacation rental property in the Florida Panhandle and acquired an investment property in Hawaii within the 180 calendar day requirement.

Foreign Investment in Real Property Act of 1980

Her CPA contacted me to assist in completing Form 8288. Every nonresident alien selling real estate must comply with the Foreign Investment in Real Property Tax Act (FIRPTA) requiring 10% of the selling price withheld and submitted to the IRS. We completed the form, submitted to the IRS in Philadelphia requesting a withholding certificate and was not required to submit the 10% which in Karen’s transaction would have represented a sizable figure. Karen chose to work with two banking service providers splitting the funds between two escrow accounts, one requiring a personal identification number and a qualified escrow account requiring dual signatures to authorize the disbursement of exchange funds. When she purchased her replacement property in Hawaii, funds were wired a couple of days in advance of the closing and the 1031 exchange was completed.

Testimonial

“You did make it easy and clear … you were the only one in the process that didn’t create a drama, ha!”

Karen Sandler, Auckland, New Zealand

 

Farmland Forward 1031 Exchange

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An Indiana farmer was looking to initiate a forward 1031 exchange, selling farmland for a vacation rental property in the Florida Panhandle. His Realtor in Florida referred him to Atlas 1031 Exchange. The Realtor called to let me know her contact that he works long hours. Born and raised around farms in Indiana, I knew what she was suggesting that it may take time to contact Dave given it was September; dry, meaning harvest time was in full swing. We first spoke on Sunday evening and I listened to his questions and explained the 1031 exchange process. Dave called later that week in the evening to ask a few more questions before deciding to work with Atlas 1031.

His Concerns Were:

  • “I don’t know Atlas 1031 or Andy.”
  • “How do I know my money will be secure and there when needed.”
  • “How complicated is this 1031?”

We talked about a 1031 exchange, the steps of the forward 1031 exchange, the banking service providers, their stability, my experience with them over the years and his options to secure his funds. Dave chose to use the personal identification number (PIN) option where the PIN known only between he and the bank, would be required to authorize the wire out. The bank called soon after the account was establised to set up his PIN. When the Florida title company was ready to close on the replacement property, I initiated the wire and the bank called Dave for his PIN. The funds were wired the same day. Dave completed the 1031 exchange before the forty-fifth calendar day so there was no need to formally identify his replacement property.

Testimonial

“How Andy explained the process is exactly how it worked. He listened and explained each answer, sometimes more than once. He was accessible, thorough and knows the 1031 inside and out. I will use Andy and Atlas 1031 again and … I am happy to help him.”

Dave Nurrenbern,
Evansville, Indiana

 

 

American Saddlebred Horse 1031 Exchange

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“The 1031 exchange went smoothly, our questions were answered thoroughly and we are very satisfied with the work performed by Atlas 1031 Exchange,” are the words the American Saddlebred horse owner used in a post-exchange review. His attorney found Atlas 1031 Exchange on the Internet along with other Qualified Intermediaries and selected Atlas 1031.

In the two horse 1031 forward exchange, the federal and state capital gain and depreciation recapture taxes from the sale of American Saddlebred gelding HS Daydream’s Celebrity were deferred with the purchase of American Saddlebred gelding Memories of Cabo. The transaction was completed within thirty days of the initial closing.

Section 1031 Exchange

Internal Revenue Code Section 1031 applies to property held in the productive use of a trade, business or for investment and provides for the deferral of federal and state capital gain and depreciation recapture taxes triggered upon sale if the seller purchases “like-kind” property and meets other conditions. The like-kind property can either be real or personal. Real property must be exchanged for real property while personal property must be exchanged for like-kind or like-class personal property. Livestock is eligible for 1031 consideration if exchanged for an animal of the same sex.

Hagan Saddlebreds
Louisville, Kentucky