Knowledge Base

Navigating the 1031 Exchange Timeline: Key Decisions and Time Frames  

The 1031 exchange timeline and time frame are key considerations for real estate investors opting for this tax-deferring strategy. When an investment property is set for sale and a 1031 exchange is chosen, two crucial deadlines are set into motion. The first is a 45-day window for identifying in writing a potential "like-kind" replacement property, followed by a 180-day period to complete the acquisition of the new property. Navigating this timeline demands prompt decisions, each carrying potential tax ramifications.

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Maximizing Value through a 1031 Exchange: The Need for a Tax Specialist  

Navigating the complexities of 1031 exchanges becomes especially challenging considering that real estate investors typically do not frequently sell their rental properties. As a result, even the most experienced tax professionals may lack the specialized knowledge needed to address all the crucial aspects of a 1031 exchange. That’s where the role of our experts at Exchange Planning Corporation comes into play.

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Understanding Cash Received and Boot will empower you to save taxes

It will also make you smarter than most tax professionals. Almost every exchange of real estate property involves boot, which is another term for cash. Sadly, most tax professionals don’t know the definition of “cash received” or why there is boot in these exchanges. Having an understanding will help you complete a valid exchange and save taxes on it, too. 

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Cost Segregation and Bonus Depreciation: Understanding the importance after TCJA

The "secret sauce" that will provide you with big tax savings. After the Tax Cuts and Jobs Act of 2017, cost segregation has become more valuable than ever in helping real estate investors accomplish their goals in a tax-efficient manner. Using cost segregation can help you shelter boot from federal taxes in an exchange, reduce your overall tax bill, and increase after-tax yields.

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Understanding Basis in a 1031 Exchange

Investors are often shocked that they haven't learned of a powerful tax savings tool call trade-up basis. One cannot complete an efficient exchange that achieves their goals in a tax-efficient manner without first understanding terms such as “carryover basis” and “trade-up basis” and how these concepts work in an exchange.

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Understanding Delaware Statutory Trusts (DSTs)

DSTs are an efficient way to reinvest your 1031 proceeds. A Delaware Statutory Trust, or DST, has become a very effective tool for helping real estate investors accomplish their goals in 1031 exchanges. In fact, it is so effective that I feel my web page would be incomplete without a brief explanation of what a DST is. That being said, almost all the goals that can be accomplished with a DST can also be accomplished with other types of real estate.

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Understanding LTV and Leverage

This article will help you how these terms are used when planning to save taxes. When you are planning a tax-efficient exchange that will accomplish your goals, debt is often a critical piece of the puzzle. The terms “leverage” and “LTV” are used to describe amounts of debts on properties you sell or properties you buy in an exchange.

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