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1031 Exchange

Leading Vegas Realty specializes in the area of 1031 Exchange and can help investors maximize their profit while buying and selling real estate investment properties. We understand the process of 1031 Exchange and can assist you every step of the way to ensure a smooth transaction.

Why should real estate investors know about 1031 Exchange?

1031 Exchange is an important tool for real estate investors to sell their investment property and buy like-kind property to defer capital gains tax. The term 1031 Exchange is defined under Internal Revenue Code Section 1031.

You, as an investor, will eventually cash out and pay taxes, but in the meantime, you can trade properties without incurring a sudden tax obligation.

Things you need to know about 1031 Exchange:

  • 1031 Exchange Like-Kind Qualifications:
    In terms of real estate, you can exchange almost any type of property, as long as it’s not personal property, effective January 1st, 2018. Both relinquished and replacement properties must be within the U.S. to qualify and must be held for use in a trade or business or for investment. Property used primarily for personal use, like a primary residence, does not qualify for like-kind exchange treatment.
  • No “Boot” Rules:
    If you want to defer every cent of tax, you want to avoid receiving boot and only receive like-kind replacement property. In order to accomplish this goal, the 1031 Exchange rules require that both the purchase price and the new debt amount be the same or higher on the replacement property and all proceeds from the sale have to be reinvested into the replacement property.
  • Identical Name(s) on the Title:
    The name appearing on the title of the property being sold must be the same as the title holder that buys the new property. However, there may be exceptions to this rule such as a single member LLC, which is considered a pass-through to the member. Therefore, the LLC may sell the relinquished property, and that sole member may acquire the new property in his/her individual name.
  • Timeline Requirements:
    The 1031 Exchange rule allows the investors 45 days to identify the replacement property after closing of relinquished property and close on replacement property in 180 days. Time is of the essence.
  • Qualified Intermediary (QI):
    A Qualified Intermediary is essential to the completion of a successful 1031 exchange. QI Prepares documentation concerning the relinquished property and the replacement property and coordinates with you on the structure of 1031 Exchange. They take control of the funds from the sale of the relinquished property and transfer the funds to the escrow company for the purchase of the replacement property.

Leading Vegas Realty works with reputable Qualified Intermediaries and title/escrow companies in Las Vegas valley and we are here to help you streamline the 1031 Exchange process in Southern Nevada and coordinate any other sales outside of Nevada.