1031 Exchange Phoenix Arizona | Investment Property Exchange

1031 Exchange Phoenix Arizona | Investment Property Exchange

1031 Exchange Phoenix Arizona | Investment Property Exchange

Due to the broad definition of “like-kind” for real property exchanges, these types of exchanges are generally one of the most common. In general, any type of U.S. real property interest held for productive use in a trade or business, or for investment purposes can be exchanged for another real property interest regardless of its grade or quality and as long as the property to be exchanged is considered real property under the state law in which the property is located. For most real property exchanges the taxable gain is due to a combination of the appreciation in value and the amount of depreciation taken over the period of time that it was owned. The following are examples of real property interests that are deemed to be of “like-kind” and that can be exchanged: vacant land, agricultural land, office buildings, industrial buildings, retail buildings, apartment buildings, multifamily rentals, single family rentals, 30 year ground leases, undivided fractional interests, mineral rights, oil fields, air rights and development rights.

Example: An investor exchanges a single family rental home valued at $1,650,000 with no debt in California for a $2,000,000 apartment building in Arizona for a tax savings of over $238,000 that can be used to purchase substantially more replacement property.

Sale Exchange
Single Family Rental $1,650,000 $1,650,000
Basis $800,000 $800,000
Gain Recognized $850,000 $0
Tax $238,000 $0
Tax Deferred Savings $0 $238,000
Cash Available For Reinvestment $1,412,000 $1,650,000

1031 Exchange Rules To Meet IRS Regulations

Real Property Use - Both your old and new properties must qualify as investment or business use. If both properties pass this test, you can exchange nearly any type of real estate.

45-Day Identification Period – You have 45 calendar days from the closing date of your sale to list the properties you may want to buy as a replacement property. There are zero exceptions to this deadline.

180-Day Exchange Period – From the sale closing date, you have 180 calendar days to close on the purchase of one or more properties from the 45-day list. There are zero exceptions to this deadline.

Qualified Intermediary (QI) – The IRS mandates that you use a qualified intermediary or QI to prepare the legal documents for your exchange. The IRS requires that the QI be an independent third party, which means that you cannot use a friend, relative, employee, broker, your accountant or attorney. The QI also holds your money in a separate account so that you do not have access to it.

Proper Title Holding – You must take title to your new property exactly as you held title to your old property.

Reinvestment Requirement – To defer all of you capital gain tax, you must buy a property of equal or greater value than the property you sold. Also, you must reinvest all of the cash proceeds from your sale.


1031 Exchange Rule Changes

The regulations, court cases and IRS rulings that may affect your 1031 exchange are ever-changing. It is important to choose a Qualified Intermediary (QI) that understands these laws and carefully monitors new legal developments.


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About Vestis Group

Vestis Group is a leading Multi Family Investment sales and Advisory Services firm with a proven track-record of providing value added brokerage services coupled with innovative and ongoing real estate investment strategies.

We specialize in Phoenix Apartments For Sale.

Our mission is to ensure that owners and investors receive the most efficient research, marketing, real estate consultation and transaction services available. We pride ourselves on our ability to deliver added value to our clients by building uncompromising and long-lasting relationships with our partners.

Vestis Group serves multi family owners and investors with a full suite of commercial real estate services, including Buyer Representation, Project Marketing & Sales, Asset Management, Condominium Association Management, Project & Development Services, Research and Consulting.

Search here for Phoenix Multifamily For SaleArizona Land for Sale or Phoenix Commercial Real Estate For Sale.

View our Arizona Apartment Brokerage & Management Services or our Multi Family Residential Investments.

For more information, please contact Vestis Group at 602-281-6202 or Email Us.

 

The information on this internet page is for reference purposes only. It is the responsibility of the user to verify availability and specific property information. This is a partial list, availability, pricing and terms are subject to change without notice. Information contained on this internet page is provided based on information deemed reliable. However, the same has not been independently verified. Principals are advised to conduct a thorough due diligence for any potential transaction. We make no representations or warranties, expressed or implied, as to the accuracy of information. Buyer must verify the information and bears all risk for any inaccuracies. Vestis Group and/or any affiliate and/or agent(s) is not qualified to provide, and have not been contracted to provide, legal, financial, or tax advice, and that any such advice regarding any investment by the recipient or user of this site must be obtained by recipients’/users’ attorney, accountant, or tax professional.

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