The 3-Property Rule The 3-property rule states that the replacement property identification during the initial 45 days of the exchange can be made for up to three properties regardless of their total value. After relinquishing their initial property, the taxpayer
The term boot is commonly used when discussing the tax consequences of an exchange. However, the term “boot” is not used in the Internal Revenue Code or the Regulations. Which is a source of confusion. The “Boot” received is the
1031 exchange is one of the most popular tax strategies available when selling and buying real estate “held for productive use in a trade or business or investment”. It allows the owner of a property to exchange one asset for another. Our
Section 1031 of the tax code allows property owners to defer taxes on the sale of their real estate held for business or investment purposes. At InSight, we use this for several strategic and preference-based reasons for clients (See What
Like-kind property is defined according to its nature or characteristics, not its quality or grade. This means that there is a broad range of exchangeable real properties. Vacant land can be exchanged for a commercial building, for example, or industrial
A sale followed by a purchase does not qualify as a 1031 Exchange. Rather a process of intention needs to be in place to qualify for an exchange to count for the tax benefits. The transaction must be treated as
Excess Funds The identification period of a 1031 exchange refers to the first 45-days when a taxpayer identifies property they would like to acquire as a replacement to their relinquished property. It is common for a taxpayer to identify more
Selling a property is a significant decision that involves numerous considerations for both the buyer and the seller. While the traditional method of immediate payment is prevalent, some sellers opt for more flexible arrangements. One such option gaining popularity is
