1031 IRC Real Estate Exchanges

Investment properties can be a great way to increase your wealth. You can defer your IRS tax obligations by the use of IRC Code Section 1031 within the United States. This section addresses like-kind property exchanges. Please refer to this IRS link for details: http://www.irs.gov/uac/Like-Kind-Exchanges-Under-IRC-Code-Section-1031

We have sold investment properties to our clients, have purchased investment properties of our own, and represented clients where the 1031 code is applicable. We recommend that you use an exchange facilitator. You cannot be your own facilitator.

When you sell your investment property or properties, the proceeds will be parked until you acquire the new property or properties in the exchange(s). There is usually a fee for this service, so be sure to find out what the costs. A reputable exchange facilitator can be found on the internet or your directory.

Exchanges are performed in two ways. A common exchange is where you sell your investment property or properties, park the proceeds, and then acquire new property or properties. After the closed sale and parking, you have 45 days to identify the property exchange(s) and 180 days to close the exchange(s). The other method is to do a reverse exchange which is more complicated. It involves the acquisition of the replacement property first through an exchange accommodation titleholder where it cannot be parked for more than 180 days.

Rich and DelAnn Lozzi are Realtors® who own their own brokerage, Delann Marie Lozzi, in California, BRE 01961327. Call them for your real estate needs at 949 525 3766,  [email protected]  https://richanddelann.com/

Here is a short you tube video that will help in understanding 1031 exchanges.