1031 Exchange Blog

Over the past 17 years, we have had the pleasure of guiding thousands of Exchangors through the 1031 Exchange process. Our Blog draws from that experience and includes content ranging from the basics of an Exchange for first time Exchangors to detailed commentary on complex exchanges for the expert investor. If you do not find the topic or specific question you are looking for, reach out to us via email at info@atlas1031.com or call our office to speak with our team at 1 800 227 1031.

FCC TV License Auction and 1031 Exchange

Posted on | by Andy Gustafson | Leave a Comment on FCC TV License Auction and 1031 Exchange

The Internal Revenue Service (IRS) has ruled the Federal Communication Commission (FCC) television and radio licenses with spectrum rights containing bandwidth differences are like-kind, or eligible for a 1031 exchange, because they were not different in nature and character, but merely grade and quality, per Private Letter Ruling 200532008. Television (TV) stations are assigned licenses with different frequency bandwidths. These licenses are being auctioned by the FCC along with other actions to free up more spectrum for broadband users by incentivizing license holders for certain TV stations to sell their rights in a FCC auction. When sold, the sole underlying property is the assigned frequency of the electromagnetic spectrum known as a FCC TV license. In Technical Assistance Memorandum 200035005 and Private Letter Rulings 8321127 and 8340041, the IRS allowed the exchange of a TV license for a radio license.

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1031 Exchange and Family Use

Posted on | by Andy Gustafson | Leave a Comment on 1031 Exchange and Family Use

A 1031 exchange is fraught with rules and requirements that, if not followed can result in an IRS audit, penalty and tax bill. Known as a like-kind exchange, the Internal Revenue Code (IRC) Section 1031 allows the deferral of federal and state capital gain and depreciation recapture when property either real or personal held in the productive use of a business or for investment is exchanged solely for property held for productive use in a business or for investment. The 1031 exchange effectively postpones the payment of the tax until the replacement property is sold and another 1031 exchange is not initiated. The strategy is recognized by the Treasury Department and enforced by the Internal Revenue Service.

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Taxpayers Wish Their Realtors Know About a 1031 Exchange

Posted on | by Andy Gustafson | Leave a Comment on Taxpayers Wish Their Realtors Know About a 1031 Exchange

Realtors and 1031 Exchange“Are you familiar with a 1031 exchange?” is a question that more taxpayers wish their Realtors would ask them when they are considering the sale of a property not held as their primary residence. Is it the Realtor’s responsibility to ask? Not necessarily; however, the Realtor is one, in addition to the taxpayer’s CPA, to be in a unique position to suggest that the taxpayer add a 1031 exchange to their list of topics to consider.

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Capital Gain 1031 Carryover and Converted Primary Residence Sale

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The landscape quietly changed for investment property acquired in a 1031 exchange later to be converted and sold as a primary residence by the American Jobs Act of 2004. Internal Revenue Code Section 121(d)(11) was amended per section 840 of the 2004 legislation for the property acquired as replacement property in a 1031 exchange, rented for two years, converted and later sold as a personal residence.  The Section 121 $250,000 ($500,000 for married filing jointly) exclusion requires that the property be held for five years beginning on the date of acquisition in the 1031 exchange. The exclusion does not apply to that portion of the gain from the sale of the property that is allocable to periods of “nonqualified use” or time held not as the taxpayer’s principal residence and depreciation recapture.

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CPA 1031 Exchange Insight

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A 1031 exchange allows the taxpayer to defer federal and state capital gain and depreciation recapture taxes when selling and replacing property held in the productive use of a business, trade or for investment. The taxpayer’s CPA should always be asked to quantify the tax consequences of the transaction, which represents one of the most important taxpayer’s criteria to evaluate when considering whether or not to initiate a 1031 exchange. Ultimately, when the 1031 exchange is reported to the Internal Revenue Service on form 8824 along with the taxpayer’s federal return, the CPA will provide the details of the 1031 exchange and affix their signature.

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1031 Exchange Vacation Property

Posted on | by Andy Gustafson | Leave a Comment on 1031 Exchange Vacation Property

1031 Exchange Vacation PropertyThe federal and state capital gain and depreciation recapture tax deferral 1031 exchange strategy is recognized by the Department of the Treasury and enforced by the Internal Revenue Service (IRS). The Internal Revenue 1031 Code applies to real, tangible and intangible personal property held in the productive use of a business or investment. Real property includes land, single family residential rentals, condominiums, commercial property and oil and gas royalties. Any tangible personal property, such as aircraft, furniture, cars, trucks, equipment, railroad cars and locomotives, livestock, artwork, gold and silver bullion, vintage sport cars and collectibles, are eligible for the tax deferral. Intangible property includes franchise rights, TV and Radio licenses, fishing permits and patents to name a few.

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