1031 Resource Center

Changing the 1031 Experience

We've brought together the educational resources, the latest in processing technology, data and 1031 funds security, and client visibility to provide an unparalleled experience for Exchangers from coast to coast.

In 2018 we set out to define what a modern end to end 1031 exchange processing solution should really look like for our clients and the settlement industry partners we support. After architecting the solution, we went out and found the best technologies and tool sets available to us in Silicon Valley. We then integrated those technologies into an end to end solution that provides our clients with a completely modern, efficient, and secure 1031 exchange process. Yes, we had to develop some “secret sauce” of our own along the way, but felt that the investment was worthwhile for our clients.

Today Fyntex leads the industry with the first secure, world class transactional experience for our Exchangers as well as for our strategic partners throughout the country.

UNSURPASSED EXCHANGING EXPERTISE

The team we gathered to support the 1031 Resource Center are all log time tax deferred exchange veterans, easily capable of answering your questions or assitsing with the most complex 1031 planning.

STATE OF THE ART PROCESSING

Fyntex has developed a proprietary processing platform which streamlines the exchanging processing while it also increases data security and visibility for Exchangers.

SECURE 24/7 VISIBILITY

Having regular access to your exchange documents as well as your 1031 exchange proceeds on deposit is critical for every Exchanger. Our secure portal provides every Exchanger and their Advisor with their own secure workspace.

ABSOLUTE FUNDS SECURITY

Fyntex is one of a very few Qualified Intermediaries using Qualified Escrow Accounts for every exchange. This security regiment requires the bank to guarantee the ready access to your funds and representst the safest method for having your funds with any Intermediary.

Prepare Your 1031 Plan

Every 1031 exchange deserves to be planned beforehand. This will give you an opportunity to anticipate the various closing logistics and engineer specific workarounds which will make the entire transaction move more smoothly.

Also, don't forget that the Internal Revenue Service allows you to exchange your tax basis from one qualifying property to another because you are move your equity and debt. That being said, here's the cheater's math for exchanging.......If you want a totally tax deferred transaction you';; need to do three things: 1) Buy a replacement property which is equal or greater than your net selling price, 2) move all equity from the old property to the new, and 3) replace your debt. And, to the extent you don't accomplish all three, you will likely owe tax on the difference.

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Setup your exchange before closing

The IRS requires that every exchange must be setup prior to the closing of the Relinquished Property. This means selecting a Qualified Intermediary who will generate the exchange related paperwork when you sell and when you buys as well as hold your hard earned exchange proceeds in trust for your duirng the 180 day exchange period.

The Qualified Intermediary cannot be someone with whom you have had an existing relationship and you should ensure that whatever Intermediary you select will properly secure your cash while on deposit. This is because while your funds are on deposit tho eexchange proceeds technically belong to the Intermediary. This is one reason why Fyntex only utilizies Qualified EScrow Accounts in which your funds cannot possibly be moved with tyour explicit written authorization as well as gthat of a bank officer. It doesn't get any safere than a Qualified Escrow Account.

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Close the Relinquished or Sale Property

When preparing your exchange documents for the sale of your Reliquished Property it is important that your Qualified Intermediary be properly assisgned the stead of the Seller in the Purchase and Sale Agreement. This, together with being shown as the Seller on the Settlement Statement or Closing Disclosure assists in the memorialization of this first transfer as part of an over all tax deferred exchange. It is this distinct which allows the deferral of capital gain with the IRS.

When the closing or settlement of your Reqinquiehed Property sale occurs, your exchange proceeds are forarded to your 1031 trust account and your 45 and 180 days clocks start for your identification period and total exchange period.

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Identify potential Replacement Properties

The IRS requires that you identify candidate or targeted Replacement Properties within 45 days of your Relinquished Property closing. In addition, an Exchanger must utilize some specific rules when identifying.

Three rules exist for the correct identification of replacement properties.

1) The Three Property Rule dictates that the Exchanger may identify three properties of any value, one or more of which must be acquired within the 180 Day Exchange Period.

2) The Two Hundred Percent Rule dictates that if four or more properties are identified, the aggregate market value of all properties may not exceed 200% of the value of the Relinquished Property.

3) The Ninety-five Percent Exception dictates that in the event the other rules do not apply, if the replacement properties acquired represent at least 95% of the aggregate value of properties identified, the exchange will still qualify.

As a caveat it should be mentioned that these identification rules are absolutely critical to any exchange. No deviation is possible and the Internal Revenue Service will grant no extensions.

* Ironically, although only approximately 3-5 percent of exchanges are audited, the few exchanges which don't pass upon audit, typically they fail because of discrepancies in identification.

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Close all Replacement Properties and report your exchange to the IRS

Once you've completed the acquisiition of all your Replacement Properties within your 180 day exchange period you exchange is technically complete. This means that you can determine you new adjusted basis and report your exchange on your next tax return.

Your exchange needs to be reported on IRS Form 8824. Ot represents a one page form where you can detail the properties you sold, the properties you acquired, and the status of your new adjusted costs basis as well as any tax owed on capital gain or depreciation recapture.

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How much replacement property should you buy?

It is important to understand how the math associated with a 1031 exchange can impacts your ownership. A completed 1031 exchange not only defers capital gain and depreciation recapture taxes, it also dramatically increases your buying power as well.

When considering a Replacement Property you need to know how much property value to acquire to successfully defer your capital gain and depreciation recapture taxes. To assist you, this nearby wizard will help you determine your ideal net purchase price, cash downpayment and the amount of debt you'll need to have a toally tax deferred transaction.

It only takes fifteen minutes...

While the logistics of 1031 exchanges have been streamlined dramatically over the years since tax deferred exchanging was incorporated into the Internal Revenue Code in 1921, it is still critical for every Exchanger to have timely access to expert advice when they need it.

Also, since most Exchangers only complete a few 1031 exchanges during the life of their invetment property ownership it is difficult for them to remember every rule or nuance which might impact the compliance of their transaction.

That is why we always have a senior FYNTEX 1031 expert available to anser your questions. Allow one of the FYNTEX experts to assist you through a brief Zoom video conference or by teelphone at 844-655-1031. Typically it only takes a few minutes for a 1031 pro to walk with you through your transaction and ensure that the proposed strategy is possible and the execution is flawless.