1031 Exchanges: Still a Great Way to Save Taxes

In today’s economy, smart investors are looking to save taxes.  1031 like-kind exchanges have long been the go-to option for sellers of real estate looking to avoiding a large tax bill.  Even in a down market, savvy real estate owners are still taking advantage of this long-standing tax savings tool.

The basics of a 1031 exchange require sellers to identify and replace the relinquished property within a specified time frame by purchasing qualifying replacement property.  In order to meet the stringent IRS requirements, informed sellers retain the services of a qualified intermediary whose sole business is facilitating exchanges.  These qualified intermediaries, whose use is generally required by the tax laws, guide the seller through the intricacies of the law and help to ensure a successful exchange.

Now, more than ever, other business owners are finding 1031 exchanges to be useful when selling assets other than real estate.  Property used in a business can be exchanged for qualifying replacement property.  Intangible assets, such as customer lists, may qualify, too.

Special exceptions can be used when the seller has to buy the replacement property before being able to sell the relinquished property.  With proper advice, 1031 exchanges can even be used to construct or improve real estate.

Like any tax savings technique, care must be given to stay in compliance with applicable laws.  Always seek the advice of an experienced tax attorney or CPA before exchanging.  And, always use a reputable qualified intermediary with a long record of successful exchanges.

Moore McLaughlin IV Esq.

My experience is focused on tax law, with emphasis on real estate, partnerships, LLCs and corporations and 1031 exchanges, self-directed IRAs, self-employment tax and COD income. Also, I specialize in estate planning and asset protection for high net worth individuals as well as basic estate planning and elderlaw matters. I represent taxpayers before the IRS and state taxing authorities in audits, appeals, Tax Court and in collections. I serve as an expert witness in cases involving 1031 exchanges and other tax matters. My law firm address is 148 West River Street, Suite 1E, Providence, RI 02904. My law firm phone number is 401-421-5115 ext. 212.

Specialties: 1031 exchanges and income tax planning, estate planning, and asset protection planning and IRS representation and self-employment tax for LLCs.

I am available to speak with you about any 1031 question you may have. As a tax attorney and CPA with over 20 years experience in the 1031 exchange industry, including service as President and on the Board of Directors of the Federation of Exchange Accomodators, there is very little I haven't seen. Call 877-395-1031 or send me an e-mail.
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Avatar About the Author: My experience is focused on tax law, with emphasis on real estate, partnerships, LLCs and corporations and 1031 exchanges, self-directed IRAs, self-employment tax and COD income. Also, I specialize in estate planning and asset protection for high net worth individuals as well as basic estate planning and elderlaw matters. I represent taxpayers before the IRS and state taxing authorities in audits, appeals, Tax Court and in collections. I serve as an expert witness in cases involving 1031 exchanges and other tax matters. My law firm address is 148 West River Street, Suite 1E, Providence, RI 02904. My law firm phone number is 401-421-5115 ext. 212. Specialties: 1031 exchanges and income tax planning, estate planning, and asset protection planning and IRS representation and self-employment tax for LLCs. I am available to speak with you about any 1031 question you may have. As a tax attorney and CPA with over 20 years experience in the 1031 exchange industry, including service as President and on the Board of Directors of the Federation of Exchange Accomodators, there is very little I haven't seen. Call 877-395-1031 or send me an e-mail.