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1031 Exchange Inherited Property

By Eusha Omar

A 1031 exchange is a powerful tool that allows you to defer the capital gains taxes associated with selling an inherited property. By engaging in a 1031 exchange, you can transfer the proceeds from the sale of an inherited property into another qualified investment or property while postponing the capital gains tax liability. With a 1031 exchange, you can increase your returns and maximize your real estate investments while avoiding hefty tax bills.

Table Of Content:

What is a 1031 exchange?

A 1031 exchange is a strategy for deferring capital gains taxes when disposing of an inherited property. The proceeds from the sale are then used to purchase another qualified investment or piece of real estate without having to pay any capital gains taxes on the transaction.

How do I access my 1031 exchange benefits?

To access your 1031 exchange benefits, you must first get in contact with a qualified intermediary who will act as an intermediary between you and your buyers and sellers during the process. The Qualified Intermediary will also structure the transaction in accordance with IRS regulations in order to ensure that it is eligible for tax-deferred treatment under Internal Revenue Code Section 1031.

How much time do I have to complete my 1031 Exchange?

You must complete your 1031 Exchange within 180 days from the sale of your property or before filing your federal tax return for that year (whichever comes first).

Are there any restrictions when completing a 1031 Exchange?

Yes, there are certain restrictions when completing a 1031 Exchange such as not using debt financing for replacement properties, purchasing like-kind properties, substituting different properties during the process, etc

Conclusion:
A1031 Exchange offers many financial benefits such as deferring capital gain taxes on an inherited asset and reducing taxes owed on income received from it's disposal. It provides investors with more flexibility than traditional sales while allowing them to keep more of their money invested instead of giving away large sums in taxes. With proper planning and understanding of all relevant rules and regulations associated with these exchanges, investors across all levels can reap substantial rewards by taking advantage of this powerful tax deferral strategy.

Eusha Omar

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