Why would you want to use a 1031 Exchange to sell an investment property?
In Massachusetts, a 1031 exchange offers real estate investors a fantastic opportunity to defer capital gains taxes. By reinvesting the proceeds from the sale of an investment property into a like-kind property, investors can defer tax payments and potentially grow their investment portfolios.
What is the first step once you decide to do a 1031 Exchange?
Consultation with a Qualified Intermediary (QI): Contact a Qualified Intermediary, a third-party facilitator who will assist in structuring the exchange and ensuring compliance with IRS regulations. It's essential to engage with a reputable QI experienced in handling 1031 exchanges.
Identify Replacement Property: Identify potential replacement properties that meet the like-kind requirement within 45 days of selling your relinquished property.
How much time do you have?
It's crucial to note that the timeline below is strict and cannot be extended, except under certain circumstances, such as presidentially declared disasters. Therefore, investors must act promptly and diligently to meet these deadlines and successfully complete the 1031 exchange while deferring capital gains taxes. Working closely with a Qualified Intermediary can help ensure compliance and a smooth transaction process.
Where can you get in touch with a Qualified Intermediary?
You're in luck! I happen to work with some of the best QI's in the greater Boston area and I would be pleased to provide you with a few of my expert recommendations.
Comments