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A 1031 exchange, also known as a like-kind exchange, is a powerful tool and strategy used to defer capital gains, state, and income taxes on real estate property. It is governed under IRS code 1031 and allows taxpayers to exchange an investment property for another. As mentioned, tax consequences of the sale will be deferred. However, in order to successfully execute a 1031 exchange or like-kind exchange, certain rules and stipulations have to be met. If you are interested in pursuing a 1031 exchange, it is highly advised to consult with a 1031 exchange tax attorney in Snohomish, WA.

An experienced Snohomish, WA 1031 exchange tax attorney can help guide you through the legal process and ensure that all goes smoothly. It is important to remember that in order to qualify for a 1031 exchange, the property that you are thinking about selling has to be replaced by another like-kind property. The IRS does not specifically corner the definition of like-kind, but the property that will be acquired under a 1031 exchange has to be real estate. For instance, you can exchange an apartment building for land. You can also exchange between buildings, raw land, strip malls, ranches, and houses. As long as the property is meant for investment purposes, it can qualify for a 1031 exchange.

A person who wants to exchange a property is known as an exchanger. Once an exchanger decides to sell his or her property, they must be able to identify another real estate property within 45 days. The property that is meant to replace the previous property must at least be equivalent in value. From that point, once the original property is sold at the end of the 45 days, the exchanger has 135 days to acquire the replacement property.

Investors should be aware that there are traps to look out for when pursuing a 1031 exchange. It is wise to seek the professional assistance of a 1031 exchange tax attorney in Snohomish, WA to help you avoid any pitfalls and missteps. A misstep can result in loss of money and unwanted tax implications. 1031 exchanges can be extremely beneficial if done correctly. There is no limit to how many times you can do a 1031 exchange, and when done right, you’ll only have to pay tax once you are ready to cash out on your property or properties.

There are several ways of doing a 1031 exchange to fit different types of situations or circumstances. It is not advised to handle this type of process alone, especially if it is your first time dealing with a 1031 exchange. It is best to consult with a 1031 tax attorney in Snohomish, WA to determine the best course of action for your investment purposes.

To learn more about the 1031 exchange, contact a Snohomish, WA 1031 tax exchange tax attorney. At the Gourley Law Group, we are a team dedicated to serving our clients with their 1031 exchange legal needs. We’ll be happy to talk to you about any questions or concerns that you may have about the 1031 exchange process.

Read a helpful article about Escaping the Crazies through 1031 by B. Craig Gourley, published on Rental Housing Journal On-Site November 2019

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Gourley Law Group

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(360) 323-2885