🎃Important Information for Investors Beginning an Exchange🎃

From October 17 – December 31, 2024

If your 1031 exchange is not complete by the due date for your tax return, you may need to file for an extension.

The time frame you have to complete the acquisition of your replacement property ends at midnight on the earlier of: (a) the 180th day after the date you transferred the relinquished property; OR (b) the due date (including extensions) for your income tax return for the taxable year in which the transfer of the relinquished property occurs. (U.S. Treasury Regulations section 1.1031(k)-1(b)(2)).

This means, if your relinquished property sale closes after October 17, 2024, your 180th day deadline to acquire replacement property will fall after the common 2024 tax return due date of April 15, 2025. In order to receive the full 180-day period to acquire replacement property, you must file an application for extension of time with the IRS to extend the due date for your 2024 tax return. If you do not file for an extension, you will NOT be able to acquire any replacement property in your exchange after your tax return due date. Taxpayers may have different tax return due dates. Please consult with your tax advisor to determine your tax return due date, and whether you will need to file for an extension.

If you have any questions, please contact your tax advisor.

National Headquarters: 800.282.1031
Eastern Regional Office: 866.394.1031

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👻1031 Exchange Webinar: Friday, December 6th👻

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🕸️1031 Exchange Webinar: Tuesday, November 5th🕸️

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🍬Tax & Legal 360 Event🍬

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🍬History of Capital Gain Tax Rates🍬

Understanding capital gains tax rates is essential for real estate investors. The U.S. tax code has evolved significantly over the years, impacting how capital gains on investments are taxed is generally based on (1) the time an investment is held and (2) the investor’s specific tax bracket. From beginning early in the 20th century until the recent Tax Cuts and Jobs Act of 2017 (TCJA), this article delves into how tax rates on capital gains have changed over time and what that means for you as an investor.

Explore the full article and gain insights that could help you navigate your investment strategy with confidence!

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 🔮Improving Relinquished Property Before a Sale🔮

It is common for a taxpayer to make repairs, updates, and improvements to enhance a relinquished property in preparation for listing with a real estate agent or broker. A commonly asked question is, “Can I be reimbursed from the 1031 exchange for the costs associated with improving or repairing the property immediately before the sale?” The answer is no, not without generating a tax consequence. The reason for this is that any exchange proceeds a taxpayer receives from a 1031 exchange are considered “boot” and are generally taxable to the extent the taxpayer has a capital gain tax consequence.

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🔥Old Homes are Now Nearly as Expensive as New Builds🔥

Buying a newly built home in the US now costs nearly the same as buying an existing home, another head-scratching reality of today’s housing market. The median new home sold for $420,600 in August, scarcely 1 percentage point more than the median existing home’s sale price of $416,700 during the same period. Measured on a 12-month rolling average, the premium for buying new is the lowest it’s been since the 1980s.

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