Frequently Asked Questions about Capital 1031 Exchange Company and our services. General questions, tax questions or exchange questions. If you do not find an answer to your question, ask an expert today.
New around here ? Start With the Basics
Can a 1031 exchange be done for a second home?
Can I buy shares in a Real Estate Partnership or REIT with my proceeds of a 1031?
Is exchanging property new?
What are the benefits of doing a 1031 exchange versus a sale?
By completing a 1031 like-kind exchange you defer your capital gain and depreciation recapture tax and therefore have 100% of your net proceeds from the sale of your investment property available to reinvest in other like-kind replacement property, especially to trade up in value and improve your cash flow.
Learn more about 1031 Exchange tax
What is a 1031 tax-deferred, like-kind exchange?
Can a taxpayer do a 1031 exchange by themselves if they document it properly?
The 1031 exchange can be quite complex
What are the different types of 1031 like-kind exchanges?
Delayed Exchange: This is the most common structure or form for most 1031 exchange transactions today. A Delayed Exchange occurs when there is a time delay between the transfer (conveyance) of the relinquished property (sale property) and the purchase of the like-kind replacement property. A Delayed Exchange is subject to specified time frames, which are set forth in Section 1.1031 of the IRS code.
Reverse Exchange: A transactional structure where the like-kind replacement property is purchased first, prior to transferring (conveying or selling) the relinquished property to the actual buyer. The Internal Revenue Service provided guidelines (safe harbors) for structuring reverse 1031 exchange transactions, as outlined in Rev. Procedure 2000-37, effective September 15, 2000.
Reverse exchanges are structured pursuant to this Revenue Procedure and are considered to be “safe-harbor” reverse 1031 exchange transactions and those structured outside of the Revenue Procedure are considered to be “non-safe harbor” reverse 1031 exchange transactions and should only be completed with competent legal counsel. Reverse 1031 exchanges are also referred to as parking transactions or parking arrangements.
Build-to-Suit (Improvement or Construction) Exchange: This technique allows the taxpayer to build on, or make improvements to, the like-kind replacement property, using the exchange proceeds before they actually take title to the property.
Personal Property Exchange: Personal property can also be exchanged for other personal property of like-kind or like-class as long as the personal property has been held for investment, income production (rental) or use in a business.
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