OK! What Are These 1031 Exchanges...REALLY!?? Some Say "Pure Possibility!"
We all may be familiar with the standard definition...."The 1031 Like Kind Exchange is a transaction that involves property held for productive use in a trade or business or for investment (except inventory and stocks and bonds) for property of the same type."
These little tax-deferral treasures have various monikers:"1031s", "Like Kind Exchanges", "Starker Exchanges", "Deferred Exchanges", "Land Swaps", "Trades". OH! and the 1031s can include real property, fleets of equipment such as airliners, trucks, buses, and so forth.
Maybe that's why I have met a few people who just worry and wonder about this tax deferred possibility. I decided I had better get educated on the subject...I am no expert, but along the way I have met some Big-Time Experts to whom I refer my clients, and DO. And you know, 1031 Exchanges some say are "Pure Possibility!"
As the result of my ever-present curiosity, over the years I have taken five or six classes on THE 1031 Like Kind Exchange. At this point, I feel somewhat comfortable in entering into an ECO-investment dialogue with my mentors. I thought you might be interested in listening in if your are seeking Sustainable /Green/ECO investments in real property,
the Asheville area might well be THE hottest market for this focus in the USA.
Up here in the mountains, cool in the summer, even, |
the ECO investment market is HOT!
And, with just a little planning, the 1031 Exchange (or 1031 Like Kind Exchange. or Swap, or Deferred Exchange, you know what I mean) can speed an investor on the way.
Unless you opt to reside there in the Greater Asheville area, the exchange is nontaxable in the current year! This is a tremendous benefit to ECO-investors, as investment property increases in value, and in a couple years these investors give me a call, we get together, and we simply exchange one property for another (again with no tax liability) ....and look to the future.
"We're Talkin' S U S T A I N A B L E " on many levels.
I always remind my clients
- to make sure that they exchange business or investment property solely for business or investment property of a like kind. Then no gain or loss is recognized under IRS section 1031...and
- to keep in mind that the regulations concerning section 1031 give specific examples of what is or is NOT Like Kind, so it is wise to seek the counsel of your attorney and CPA while you and I are out locating the replacement properties.
- NO they can't live in the property more than two weeks a year...even though once you arrive in Asheville, you fall in love and won't ever want to leave. (I'm smiling)
Examples of 1031 Exchange:
Horse or Equine property in Tryon, North Carolina would be Like Kind with an apartment complex or duplex located in Asheville. Farmland for residential property that is rented, but that is and not lived in by the investor, is also Like Kind.
More on this subject ? Check out the side bar at my BLOG.
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