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.

Capital Gains Tax Deferral

Posted on | by Andy Gustafson | Leave a Comment on Capital Gains Tax Deferral

Deploying a capital gains tax deferral strategy merits additional attention given the pending federal changes effective January 1, 2013. Taxes on ordinary income will increase from 35 percent to 43.4 percent for earners in the highest bracket.  The long-term capital gain rate will increase from 15 percent to 23.8 percent including the new 3.8 percent “health care tax” on interest, dividends and other passive income earned by individuals with income more than $200,000 per year, or $250,000 for married taxpayers. The estate and gift tax will also change. The current estate and gift tax exclusion is $5 million with any excess subject to a federal estate tax of 35 percent. Effective in 2013, the exclusion returns to $1 million with the maximum estate and gift tax increasing to 55 percent.

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Improvements to be Constructed in a 1031 Exchange

Posted on | by Andy Gustafson | Leave a Comment on Improvements to be Constructed in a 1031 Exchange

When a taxpayer plans to include improvements to be constructed in a 1031 exchange, the role of the Qualified Intermediary (QI) is extremely important. The Exchange Accommodator Titleholder (EAT) will hold the title to the property while the QI holds the cash included in the transaction while improvements are being made. The QI will then pay the vendors and contractors, and prior to the 180th calendar day post-closing on the old or new property, the EAT will convey title to the taxpayer.

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1031 Real Estate Exchange Rules

Posted on | by Andy Gustafson | Leave a Comment on 1031 Real Estate Exchange Rules

1031 real estate exchange rules define how to go about deferring federal and state capital gains and recaptured depreciation taxes when selling and replacing a real property investment. A 1031 exchange, or Internal Revenue Code (IRC) Section 1.1031, allows any entity, both U.S. residents and foreign non-residents, to defer or postpone the payment given certain 1031 real estate exchange rules are strictly followed. The first step is to be aware that the taxes can be deferred indefinitely or until the replacement property is sold. Taxes, both federal and state, along with a twenty-five percent recaptured depreciation tax, can amount to upwards of 40 percent of the property’s sales price. If you could be given up to 40 percent of the real estate sales price interest free to use towards acquiring replacement property, wouldn’t you ask what the 1031 real estate exchange rules and requirements are?

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Advance Auto Parts in Ridgeland, South Carolina 1031 Eligible

Posted on | by Andy Gustafson | Leave a Comment on Advance Auto Parts in Ridgeland, South Carolina 1031 Eligible
Advance Auto Parts Triple Net Lease 1031 EligibleA 6,800 square foot Advance Auto Parts in Ridgeland, South Carolina is a 1031 eligible investment replacement property featuring new construction to be completed in October, 2012 and a 15 year net lease. Price is $1,317,057 with a capitalization rate of 7.0%.
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1031 Exchange and Personal Use

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

In a 1031 tax deferred exchange, what amount of personal use is acceptable? If a vacation rental property is held for investment, how many days can the titleholder use for their family? A 1031 exchange is a well-documented tax deferral strategy recognized by the Internal Revenue Code (IRC) Section 1.1031. The theory is when a taxpayer, either domestic or foreign, sells real or personal property held in a trade, business or for investment and reinvests the sales proceeds and debt retired, their economic position has not changed. The taxpayer has not received the realized gain in the form of cash or reduced debt; consequently it would be unfair for a capital gain and recaptured depreciation tax to be paid. The gain is deferred when the replacement property is sold. When sold (and another 1031 exchange is not initiated), the original deferred gain plus any additional gain realized since the purchase of the replacement property is subject to tax.

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