May 2013

       1031 Resources                         The 1031 CORP. Advantage                            Wealth Building Webinars 

UPDATE ON EFFORTS TO PRESERVE 1031 EXCHANGES
Your Assistance is Requested   

On May 6th, the House Ways & Means Committee issued a report summarizing the comments received by the eleven Tax Reform Working Groups formed by Chairman Camp. Both the repeal and a simplification of section 1031 were mentioned. As someone who has benefitted from a section 1031 exchange or someone who has had a client that has, we urge you to send a letter supporting section 1031 to Sen. Max Baucus (D-MT), Chairman of the Senate Committee on Finance, Representative Dave Camp (R-MI), Chairman of the House Committee on Ways and Means, as well as your local Congressional leaders.

 

Click here to find a one page sample letter that you can forward to them. We encourage you to include something about the difference section 1031 made in your particular situation. We thank you for your support.

 

View the Impact of IRC �1031 on the Economy white paper published by the Federation of Exchange Accommodators (FEA), the national trade association for the 1031 exchange industry.

 

To discuss in more detail, please contact Margo McDonnell at margo@1031CORP.com or 610.792.4880. 1031 CORP. will continue to provide updates in our newsletters. 

 

1031 Does More Than Defer Taxes

Many Often Overlooked Benefits 

Goals
Sure, everyone wants to reduce their tax liability and Section 1031 of the Internal Revenue Code allows you to defer the gain on the sale and subsequent acquisition of "like-kind" property held for business use or investment.  Exchanges are much like a typical sale followed by a purchase but they are linked together by paperwork and completed within certain timeframes.   A 1031 exchange allows you to defer the gain as long as the replacement property is held and if you eventually sell that, assuming it still qualifies, you can 1031 exchange again.  While the deferral of the gain is the most commonly thought of benefit of Section 1031, it is all of the opportunities that this tax deferral opens up that are the most important benefits of exchanging.
 

Following are just some of the numerous benefits of exchanging:

  • Time Value of the Deferral.  A 1031 exchange gives you the opportunity to acquire replacement property using pre-tax dollars.
  • Levering the Deferred Gain.  The deferred gain can be leveraged into a significantly higher priced replacement property that will likely generate additional cash flow from Day 1 and enjoy greater long-term appreciation.
  • Defers Depreciation Recapture:  A 1031 exchange defers the capital gain (or a loss) as well as the depreciation recapture which is usually recaptured at 25% on real estate.
  • Minimize Income Tax Paid:  As the deferred gain does not increase a taxpayer's income, it could keep you out of the highest income tax bracket and capital gain rates as well as helping you avoid the new 3.8% Medicare Tax, AMT, personal exemption phase outs and the Pease limitations.

The ABCs of 1031 Exchanges

An Alphabet Soup of Simplicity

 

All 1031 tax-deferred exchanges include the same essential ingredients but for those completing their first one or haven't completed one in some time, they can seem a little overwhelming. The advantage of working with an experienced qualified intermediary (QI), like 1031 CORP., is their ability to keep the exchange process simple for all parties.

 

Below are the ABCs of exchanging to keep in mind during your exchange:

  • Like-Kind Property. The relinquished and replacement properties must be like-kind. When exchanging real estate, any type of real property qualifies provided it is help for business use or investment. When exchanging personal property assets, both properties must be within the same asset classification system or the same type of property.
  • Held for Investment or Use in a Trade or Business: Personal use properties, "flips" and dealer property held for sale do not qualify.
  • No Rights to Exchange Proceeds: You cannot have actual or constructive rights to the exchange proceeds which are typically held by the QI. Once funds are deposited into the exchange account, they can only be withdrawn for expenses directly related to the acquisition of the replacement property or at certain times allowed by the regulations.                            

Review the ABCs of 1031

Wealth Building Webinars
webinar Join us for our complementary Wealth Building Webinar Series  designed to help you build and preserve wealth.

 

Thursday, June 6, 2013 12:00 PM - 12:45 PM EST 

1031 Exchanges Made Easy 

 

Thursday, June 13, 2013 12:00 PM - 12:45 PM EST  

Advanced 1031 Exchange Topics 

 

Thursday, June 20, 2013 12:00 PM - 12:45 PM EST  

1031 Exchanges of Vacation Homes 

 

Thursday, June 27, 2013 12:00 PM - 12:45 PM EDT

Current Trends in 1031 Exchanges 

 

Trending this Month... nothingness  
Nothing!
Yes, we said nothing. There is no one thing that is trending this month.  We are, however, seeing a significantly greater number of investors and business owners initiating a 1031 exchange.    
Message from our President
Margo
Margo McDonnell

 

Dear Friends,


Despite being spring for a full month already, it is finally starting to feel like it. For those of us in the 1031 exchange industry, business is also heating up. The number of new exchanges is significantly greater than just six months ago. Obviously, a large reason is the increased capital gain tax rates and the new 3.8% Medicare Tax that is due for most sellers but as mentioned above, there are many other benefits of exchanging.

 

The focus of this newsletter is the result of so many past clients and their professional advisors looking for a refresher on 1031 tax-deferred exchanges. We also wanted to remind everyone the benefits an exchange offers and encourage you to at least consider whether or not a 1031 tax-deferred exchange makes sense in a particular situation. It may not but it also might make a lot of sense. Your tax advisor can help you decide.

 

And I urge everyone to send a letter to your Congressional leaders supporting the retention of section 1031, as is. Exchanges do a lot more than defer taxes, they create the opportunity to accomplish many short and long-term objectives for investors and business owners.


Best Regards,

Margo

 

About 1031 CORP.
Serving as a nationwide qualified intermediary for 1031 tax-deferred exchanges since 1991, 1031 CORP. strives to provide a superior exchange experience for our customers and their advisors.  We provide our customers with enhanced security of funds, knowledgeable exchange professionals and a commitment to keep the exchange process simple for our customers and their advisors.  Every member of the exchange team is a Certified Exchange Specialist� and has the experience and expertise to facilitate even the most complex exchange transaction, including reverse, improvement and personal property exchanges.  Additional information can be found at www.1031CORP.com.
In This Issue
Update on Efforts to Preserve Section 1031
1031 Does More than Defer Taxes
The ABCs of 1031 Exchanges
Wealth Building Webinars
Trending this Month
Message from our President
Article Exchange

Margo McDonnell

Margo McDonnell, CES
Certified Exchange Specialist
President
1.800.828.1031 ext. 212
Mobile: 610.680.6896
 
Find me on Facebook
View my profile on LinkedIn

1031 CORP. Logo

Sue Umstead, CES 
Certified Exchange Specialist
Senior Vice President
1.800.828.1031 ext. 208
Mobile: 610.755.8520

Find me on Facebook
View my profile on LinkedIn

1031 CORP. Logo

Marissa LoCascio, CES
Certified Exchange Specialist
Senior Exchange Officer
1.800.828.1031 ext. 210
Mobile: 610.742.4351

Find me on Facebook
View my profile on LinkedIn

Rich Heller

Richard Heller, Esq., CCIM, CES
Consultant
1.800.734.1031 
  
Find me on Facebook
View my profile on LinkedIn

 Bettye Matthews

Bettye J. Matthews, CPA
Consultant
1.800.680.1031 
 
View my profile on LinkedIn

Joe

Joseph F. Szajnecki, CES�
Consultant
1.800.734.1031 
Article Exchange

Following are articles related to 1031 exchanges, taxes, real estate and related topics you may find of interest.  

 

New Lease Accounting Proposal Continues to Vex CRE Groups

CoStar Group

May 29, 2013 

 

Sellers Calling Shots on Home Deals

CNN Money

May 30, 2013      

 

Section 1031 Like-Kind Exchanges Serve as Vital Stimulant for Economic Growth 

WebWire

April 2, 2013

 

Largest Gains for Home Prices in 7 Years, Forget Bubble Talk for Now 

Yahoo! Finance 

May 28, 2013

Vacation Home Prices Continue to Soar

Money

May 30, 2013

 

If you have an article you would like to share, please forward it to Margo McDonnell,CES� and we'll include it in next month's reading list.
Shale 1031CORPInterested in staying
up to date with Marcellus Shale?  
 
Follow us on Twitter  
Like us on Facebook 

Not a Subscriber?  Interested in receiving our Exchanging Times newsletter each month? 

Join Our Mailing List

 

Follow 1031 CORP

"LIKE" 1031 CORP. on Facebook to receive a daily tidbit on 1031 exchanges and related topics.

 

 Find us on Facebook

View our profile on LinkedIn

Follow us on Twitter

Visit our blog