Spring 1031 Exchange Update
Is a Partial Exchange Right for You?
A prevailing misconception is that a taxpayer considering a 1031 exchange should always seek to obtain full tax deferral. However, in reality, approximately one-third of taxpayers opt for a partially-deferred 1031 exchange. (Ling & Petrova, The Tax and Economic Impacts of Section 1031 Like-Kind Exchanges in Real Estate (2020) (submitted to the Real Estate Research Consortium), page 12).
Rather than reinvesting the entire net proceeds and acquiring property with an equivalent or higher total amount of debt, some taxpayers opt to reinvest into a replacement property and receive boot. This approach offers numerous benefits, including partial tax deferral and the redeployment of proceeds into another property, thereby enhancing return on investment. The boot portion of the transaction may consist of cash boot (actual cash proceeds received by the taxpayer) or mortgage boot (a reduction in mortgage liabilities on the replacement property compared to the mortgage liabilities on the relinquished property). Typically, cash boot and mortgage boot are taxable, although in certain circumstances boot may not be nontaxable, depending on the taxpayer’s unique facts and circumstances. For instance, a taxpayer may have suspended carryforward losses that could be used to offset some or all of the otherwise taxable boot.
1031 Exchange Webinar for Real Estate Professionals
Friday, June 21st
12:00 PM – 2:00 PM CT
CE Available
This two-hour course for commercial brokers provides a concise and thorough overview of 1031 exchanges. This webinar tackles advanced issues such as partnership/LLC scenarios, creative property variations such as perpetual cellular easements (cell towers), fractional ownership, transferable development rights, reverse and improvement exchanges, how to avoid common pitfalls and related-party transactions.
1031 Exchange Webinar for CPAs
Tuesday, May 7th
10:00 AM – 11:00 AM CT
CPE Available
This one-hour intermediate/advanced webinar covers critical time deadlines, like-kind requirements, fractional ownership, oil/gas/mineral rights, related party transactions, partnership/LLC scenarios, reverse and improvement exchanges, and how to avoid common pitfalls.
SC Non-Resident Real Estate Withholding & Exchanges
Watch this insightful session exploring South Carolina Non-Resident Real Estate Withholding and the intricate world of 1031 Exchanges. This on-demand webinar promises valuable insights and expert guidance to navigate these complex topics. Secure your spot now and elevate your understanding of real estate investment strategies!
IRS Form 8824 Like-Kind Exchanges
The tax filing date for many taxpayers is just around the corner. The Internal Revenue Service Form 8824, Like-Kind Exchanges, must be completed and filed with the IRS every time a taxpayer performs a 1031 exchange. The IRS Form 8824 contains three sections related to a 1031 exchange:
- Part 1, Information on the Like-Kind Exchange;
- Part II, Related Party Exchange Information; and
- Part III, Realized Gain or (Loss), Recognized Gain, and Basis of Like-Kind Property Received.
Federally Declared Disaster Extension Information
Click the link below to determine if you may qualify for an extension.
https://www.irs.gov/newsroom/tax-relief-in-disaster-situations
Additional information here: https://apiexchange.com/disaster-relief/
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“I highly recommend API. I recently used them for my 1031 exchange. They were very professional and quick to answer any questions I had regarding my transaction. Their communication was great and I would not hesitate to use them again.”
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Overview of the Corporate Transparency Act (CTA) Reporting Requirements
As of January 1, 2024, the federal Corporate Transparency Act (CTA) has been implemented to enhance transparency and hinder illicit activities facilitated by obscure ownership structures. The CTA mandates the reporting of Beneficial Ownership Information (BOI) concerning the ultimate individual owners of entities, with reporting conducted through the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)…
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