Orlando 1031 Exchange Information
The popularity of 1031 exchanges has increased dramatically over the last several years. They've become a driving force in commercial real estate sales transactions. Tax specialists say that the volume of 1031 exchanges, nationally, has risen 25% over the past three years.
What is a 1031 Exchange?
A 1031 exchange is recognized as a powerful tool for investors to keep more appreciation in their investment properties by deferring capital gains taxes. Now there are even more options for those that don't want the day to day "headaches" of owning another commercial venture.
The tenant-in-common (TIC) structure provides an alternative for the passive minded real estate investor. As the number of 1031 TIC providers increase so does the available inventory making the 1031 TIC even more attractive to the average investor.
Considering the value of a 1031 exchange may represent a significant portion of an investor’s net worth and retirement, all steps taken and decisions made are critical to a successful exchange.
1031 Exchange Rules
The rules for completing a 1031 exchange, as required by the IRS, are clear and require strict adherence. The investor must not take possession of the proceeds of sale. All proceeds to be exchanged must be deposited with an independent party called a qualified intermediary (QI) or exchange accommodator.
The role of an experienced QI is important. The QI will assist with documenting the exchange process while safekeeping the funds in a properly established trust account. All steps to the exchange transaction will be recorded and monitored by the QI.
1031 Exchange Time Frame
An investor has 45 days from the closing of the property to select and identify, in writing, property(ies) to purchase, and 180 days in total to close the purchase of the property(ies). This limited timeframe to decide on suitable property(ies) to purchase can be a daunting challenge. Holidays and weekends count, so this selection period can be shortened to, as few as, 30 working days.
The role of a securities broker/representative, as a property advisor, to help locate the best property(ies) for the investor’s situation can be invaluable, given this restricted timeframe.
Identifying Properties
The source of the property(ies) should be carefully researched. An investor will own the property(ies) for some time into the future, during cyclical real estate markets and economic turns. The role of the real estate provider or sponsor must be considered carefully in the exchange process.
The investor should know as much as possible about the level of expertise and experience of the company.
Our Qualifications
In addition to being licensed Realtors we at OrlandoMLS.com are Securities 6,7,63 and 24 Licensed, Registered Investment Advisors with over 10 Yrs. experience. Member NASD & SIPC.
We are able to provide turn key solutions for all your 1031 Exchange needs.
Contact us today using the form below for more information regarding 1031 Exchanges and 1031 Exchanges with Tennants In Common (TIC) or call Andy Polce at: 866 220-7393.
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