Defer your taxes with a 1031 Exchange
Secure your next investment with Global! We help savvy investors make use of the 1031 Exchange (as set forth in Internal Revenue Code Section 1031) to defer capital gain taxes while selling an existing qualified property.
IRC Section 1031 allows an investor to sell a property, and to reinvest the proceeds in a new property and to defer all capital gain taxes. IRC Section 1031 (a)(1) states:
“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment, if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”
At Global, we are Florida vacation home and investment property experts. Many clients come to us who own investment property elsewhere who are considering selling. The 1031 Exchange can prove a highly tax efficient way to dispose of current assets while acquiring a valuable vacation home or investment property in Florida.
Our Experts are here to help you understand 1031 Exchange Rules
Global works seamlessly with our preferred 1031 Tax Exchange intermediaries to make simple what could otherwise be a complex, painful process. Vacation rental properties, in ideal locations, represent a fantastic investment vehicle because they can be utilized for personal use and optimized for return with rental revenue when you’re not using it. Global has specialized in vacation home sales and property management since 1993, and we take pride in finding the ideal solutions for our clients.
Contact us today for a free, no-pressure consultation to discuss your 1031 Exchange. Let us help identify exchange properties that best fit your real estate investor strategy and objectives.
1031 Exchange Rules and Terminology
What is Like Property?
IRC Section 1031 limits like-kind property to only certain types of real property. Real property must be exchanged for like-kind real property. Real property held for investment can be exchanged for real property used in a trade or business. Real property held for use in a trade or business can be exchanged for real property held for investment.
Qualifying Real Property
The types of real property which can be exchanged under Section 1031 are very broad. Any real property held for productive use in a trade or business or for investment, whether improved or unimproved, is considered like-kind real property.
What is Excluded?
Personal property is not eligible for 1031 exchange tax deferral. Primary residence and property held primarily for resale or dealer property are excluded from tax deferral under Section 1031.
Sale of the Your Property
Prior to closing the sale of your property, you enter into an Exchange Agreement with a qualified intermediary. All proceeds are transferred directly to the qualified intermediary, thereby protecting you from actual or constructive receipt of funds.
A delayed exchange is the most common exchange format, providing you the flexibility of up to a maximum of 180 days to purchase a replacement property.
Identification of Replacement Property
You must properly identify potential replacement properties within 45 calendar days. The qualified intermediary provides you with the specific identification requirements.
Purchase of the Replacement Property
You have a total of 180 calendar days from the closing of your sold property, or their tax filing date, whichever is earlier, to acquire like-kind replacement properties. The exchange is completed when the qualified intermediary purchases the replacement type of property with the exchange proceeds and transfers it back to you by a direct deed from the seller.
The improvement exchange allows you, through the use of an Exchange Accommodation Titleholder (EAT) owned by a qualified intermediary, to make improvements on a replacement property using exchange equity. You can maximize investment opportunities using tax-deferred dollars by building or improving a replacement property in a 1031 exchange.
Our Experts are here to help
We recommend you talk to an expert before making any decisions. We can help you find advisors to help you with due diligence to help you determine if this is the best opportunity for you. Regulations and programs do change. This information is based on the information we gathered when publishing on this website. Please contact us for more information and to help you determine if this is a viable opportunity for you.