The Keys to Exchanging
Here's an index of the items which will asisst you in streamlining your exchange.
The 1031 Exchange. The Nation's Greatest Wealth Building Tool!
Tax deferred exchanging has been in the Internal Revenue Code for almost 100 years and it still represents the best wealth building vehicle available to investment property owners from coast to coast.
In order to complete a compliant 1031 exchange there are a few keys rules with which you must be familiar. The three item below represent the main rules set forth by the IRS for your exchange.
180 Day Exchange Period
45 Day Identification Period
You must use a Qualified Intermediary
In addition to the rules regarding timing and the types of properties available to be exchanged, here are a few guidelines which will help streamline your exchange.
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Start 1031 Before Closing
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Exchange as the Same Entity
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Buy What You Identified
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Don't Forget Your 1031 Math
Once your exchange has been completed you'll need to include the details associated with your exchange on your next tax return. You'll need to attach IRS Form 8824 with your tax return. It is a one page form which informs the Internal revenue Services regarding your underlying 1031 exchange math and which allows you to transfer your adjusted cost basis from your Rel9nquished Property into your Replacement Property. This is also the form where you will report any cash or mortgage boot as well as any tax owing.
