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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Webinars: 1031 Exchange Issues in 2018

1-Hr Webinar for CPAs

Join our one-hour 1031 exchange webinar for tax and legal advisors (CPE credit available) on Monday, September 10th at 11:00 a.m. EST. This webinar tackles issues such as reverse and improvement exchanges, related party issues and how to avoid common pitfalls. You will receive a summary of current developments regarding possible tax reform and the implications on 1031 exchanges.

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2-Hr Webinar for CRE Brokers

This two-hour course for commercial brokers provides a concise and thorough overview of IRC Section 1031 tax-deferred exchanges. Join us on Wednesday, September 5th at 12:00 p.m. EST. This webinar tackles advanced issues such as recent developments on tax reform bills, reverse and improvement exchanges, how to avoid common pitfalls and related-party transactions.

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The States with the Best and Worst Economies

As was the case last year, Colorado’s economy ranks as the best in the country, due largely to its GDP and job growth, which each ranks among the top five nationwide. The state economy has expanded by an average annual rate of 2.7% over the last five years, and employment has increased by an annual average of 2.4% over the same period, compared to national growth rates of 1.7% and 1.5%, respectively. Nationwide, many of the jobs in the fastest growing…Read More

The Cost Seg/1031 Exchange Combo is Even More Important Under Tax Reform

Under the Tax Cut and Jobs Act, the benefits of combining cost segregation and Section 1031 exchanges have become an even more important tax strategy for real estate investors. With the recently passed TCJA, the rules for Section 1031 exchanges have been modified and depreciation rules have been expanded. The interplay of these new rules creates new opportunities that one might overlook — namely, the ability to utilize a cost segregation study to identify short life assets that will be fully depreciated and ultimately retired. The no-value assets are then not considered to be a part of the Section 1031 exchange – resulting in no depreciation recapture tax. Read More

Call Us

Asset Preservation would appreciate the opportunity to work with you on your next exchange regardless of how simple or complex. Give us a call at 800-282-1031 with any 1031 related questions or Open a 1031 Exchange Online.

New Location, Same Excellent Customer Service

The surge in 1031 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 larger location at 1490 William Floyd Parkway, Suite 103, Shirley, NY 11967. Our toll-free phone number remains the same, 866-394-1031.