In this 1031 exchange, capital gains taxes were deferred when Indiana farmland was sold and replaced with a Florida vacation property short sale. The exchange started with the client finding Atlas 1031 following a Google lookup using keywords 1031 exchange and the client’s home town. “The Atlas 1031 web site came to the top of the search list. The detailed site provided the information and confidence to proceed with making contact.”
This was the client’s first 1031 exchange and he was looking mostly for information in the beginning. “Atlas 1031 was quick to follow up with a phone call to discuss my requirements.”
For those not familiar with a 1031 exchange, the Internal Revenue Service (IRS) allows for the deferral of capital gains and recaptured depreciation taxes when real and personal property held in the productive use of a business or for investment is exchanged for real and personal property held in the productive use of a business or for investment within 180 calendar days of the first closing. Given the intent when selling real estate, artwork, aircraft or equipment is to replace with like-kind property of equal or greater value, then the taxes are deferred indefinitely or until the replacement property is sold. There is no limit to the number of 1031 exchanges a taxpayer can initiate. In 2012, the Joint Committee on Taxation estimates $3.2 billion taxes will be deferred in 1031 exchanges.
“Where do you start?” “How do you trust a company to correctly follow the IRS requirements?” These were some of the questions the client wanted to answer. After the initial education of how a 1031 works, the client’s main concern focused on the timing of the transactions given the replacement property was a short sale. Fortunately, they had flexibility on when they sold and closed on the Indiana farm allowing them to coordinate the Florida vacation replacement property closing within the same week. Consequently, the exchange funds were wired directly from the farmland closing to the attorney’s office in Florida. “The short sale added another layer of complexity but in the end, the bank signed the notice of assignment of the sales contract and the exchange worked easily.”
Trust is a major issue when selecting a qualified intermediary. A qualified intermediary is required by the IRS when initiating a 1031 exchange. Atlas 1031 Exchange is a full time provider of qualified intermediary services with a Certified Exchange Specialist© on staff accommodating 1031 exchanges worldwide.
How did Atlas 1031 Exchange earn the client’s trust?
“Atlas is a very good communicator, both with timely email responses and return phone calls. In fact, in most instances, the phone call was answered on the first dial. Getting answers fast was my key to earning trust.”
Kurt and Mary Kroemer, Zionsville, Indiana
