1031 Exchanges Face Uncertain Future

Section 1031 Under Siege

There are currently three different proposals that the federal government is weighing, which would significantly alter Section 1031:

  1. Former Sen. Max Baucus (D-Montana), who became U.S. ambassador to China earlier this year, released a draft proposal when he was chairman of the Senate Finance Committee that would potentially eliminate 1031 exchanges. His proposal, which is still before the Senate Finance Committee for discussion, contains other provisions unfavorable to real estate investments, including lengthening depreciation schedules for commercial and residential properties from 39 and 27.5 years, respectively, to 43 years for both and characterizing gains from real estate sales as ordinary income, instead of capital gain.

  2. U.S. Rep Dave Camp (R-Michigan), chairman of the House Ways and Means Committee, has released a proposed tax bill eliminating all Section 1031 exchanges beginning Jan. 1, 2015.

  3. President Obama, in his 2015 budget proposal, wants to limit the amount of capital gains deferred in a 1031 exchange to $1 million (indexed for inflation) per taxpayer per taxable year, beginning Jan. 1, 2015.

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Asset Preservationā€™s Eastern Regional Office has Relocated

API's Eastern Regional Office

The surge in 1031 tax deferred exchange activity has dramatically increased in the Eastern United States. To help provide continued excellent customer service, Asset Preservation’s Eastern Region Office has relocated to a new larger location at 100 Motor Parkway, Suite 150 Hauppauge, NY 11788 (See it on a map). Our toll-free phone number remains the same, 866-394-1031.

Jennifer A. Pendzick

Jennifer A. Pendzick | VP of Operations – Eastern Region
100 Motor Parkway, Suite 150 Hauppauge, NY 11788

1031 Basics: 1031 Exchange Checklist

1031 Exchange Basics

Are you looking for an easy-to-use reference guide for the steps involved in a typical delayed 1031 exchange transaction? Download Asset Preservation’s 1031 Exchange Checklist to access a useful one-page checklist showing the steps involved before signing the contract for the sale of the relinquished property, setting up an exchange with a qualified intermediary, the 45-day identification period, acquiring replacement property and through the end of the 1031 exchange process. Download Here…

PLR 201416006 (Reverse Exchange with Multiple Related Parties Selling)

This ruling addresses a creative situation involving a taxpayer and two related parties that intended to acquire the same replacement property in accordance with IRC Section 1031 and also Revenue Procedure 2000-37. The IRS permitted tax deferral under Section 1031 even though the Exchange Accommodation Titleholder (EAT) entered into Qualified Exchange Accommodation Arrangements (QEAAs) with more than one entity, including entities related to the taxpayer, both of whom had a bona fide intent to utilize a reverse exchange format to defer capital gain taxes.

Private Letter Ruling 201416006 notes that Revenue Procedure 2000-37 does not prohibit an EAT from functioning as an EAT to more than one taxpayer under multiple QEAAs for the same parked exchange property.

Charts on Real Estate Prices, Loan Rates and Housing Statistics

View Chart

To access charts showing you the latest real estate related trends, view charts, and access the S&P Case-Shiller 20-City Home Price Index, National Home Price Index, Average Sales Price of Houses Sold by FHA, Housing Starts, Residential Construction Spending, Housing Affordability Index, Household Debt to Disposable Income, and CPI – Rent of Primary Residence 30 Year Conventional Rate Mortgage. View Charts…

Building Wealth through Real Estate Investing and 1031 Exchanges Webinar

Did you know that capital gain taxes percentage-wise went up 58%? 

Fact! 1031 Exchange expert, Scott Saunders of Asset Preservation Inc, along with Bruce Bowen of Avenue A Investment Properties, explain how 1031 exchange activity is dramatically on the rise. Learn about what is happening today with 1031 exchanges, the rules for full tax deferral, the 45/180 day deadlines, how to identify property, reverse & improvement exchanges, the types of qualifying like-kind property, Qualified Intermediary due diligence. Additionally, the webinar features some fantastic, high cash flowing rental real estate now on sale in some of the attractive markets in the country. Register Now…

Six States Post New Highs in Home Prices

Six States Post New Highs in HomeĀ Prices

Home prices in five states, Colorado, North Dakota, South Dakota, Texas and Wyoming and the District of Columbia posted peak prices in March. Read Moreā€¦

Attend a Complimentary 1031 Exchange Webinar

Title: The Power of Strategy: Mastering 1031 Tax Deferred Exchanges
Presenter: Scott Saunders, Asset Preservation, Inc.

Course Description
This 90-minute course provides a concise and thorough overview of IRC Section 1031 tax deferred exchanges for accountants, CPAs and tax advisors. In addition to covering critical IRS time deadlines, like-kind requirements, and other exchange-related issues; the class will provide a summary of current developments including applicable Revenue Rulings, PLRs, and other IRS guidance on current issues related to exchanges.

Course Details:
Date: Monday, May 19, 2014
9:00 a.m. ā€“ 10:30 a.m. (PST)
Cost: Free
Credits: 1.5 hour (Accountants & CPAs)

Click here to View Details and Registration Info at cpaacademy.org

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