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Working with 1031 Asset Exchange 
1031 CORP. announced today that it has acquired the assets of 1031 Asset Exchange and will now offer the many clients of 1031 Asset Exchange qualified intermediary services under the 1031 CORP. brand.  The transaction was completed April 22, 2014.


1031 CORP. specializes in the facilitation of IRC section 1031 tax-deferred exchanges of business use and investment assets.  In its capacity as a qualified intermediary, 1031 CORP.'s team of Certified Exchange Specialists� has assisted thousands of taxpayers preserve the equity in their investment and business use assets and acquire replacement property that better fits their needs and wants.  1031 CORP. employs numerous procedures to ensure the security of clients' funds, including on-line account viewing capabilities, account statements directly from the depository and Qualified Escrow Accounts.  


1031 Asset Exchange, based in Bend, Oregon, was founded by Sanna Phinney, CES� in 2003 and earned a reputation for their knowledge of section 1031 and commitment to providing exceptional services.  Phinney is now a member of the 1031 CORP. Exchange Team and was named senior vice president. She will continue to lead sales efforts in the Pacific Northwest as well as consulting with taxpayers seeking to exchange assets.   


"I had the great pleasure of working with Sanna on the Certified Exchange Specialist� (CES�) Certification Council and quickly developed great respect for her knowledge of exchanges and the facilitation process as well as her commitment to the growth and professionalism of the exchange industry. Over the years, we became allies as we each worked to grow our respective businesses and bounced ideas off each other. We have talked about joining forces for years and I am thrilled Sanna is now part of our 1031 CORP. family.  I have no doubt she will be a valuable part of our continued success." said Margo McDonnell, CES�, president, 1031 CORP.


Phinney added "With the changing economic tide, it became evident to me that 1031 Asset Exchange must evolve to offer increased protection to our exchange clients while continuing to provide them exceptional service.  1031 CORP. and 1031 Asset Exchange share a common philosophy with regards to customer service and our mission will be to continue to exceed the expectations of our clients and their advisors.  I chose to partner with 1031 CORP. in order to maintain this standard of service, but to also provide a more secure environment for my clients.  This partnership will provide enhanced security of funds and access to knowledgeable exchange professionals, while keeping the exchange process simple for our clients.  With 1031 CORP.'s team, we have experienced Certified Exchange Specialists� overseeing each exchange transaction.  All of these factors drove my decision to partner with Margo McDonnell and her team at 1031 CORP."


1031 CORP. continues to seek innovative opportunities and strategic marketing alliances to expand its footprint and enhance the 1031 exchange experience for its clients. In January 2011, 1031 CORP. announced its partnership with Exchange Professionals, Inc., based in Westminster, MD and the addition of its principal, Bettye Matthews, CPA, as a consultant and in July, 2012, partnered with R.E.I. Consultants, Ltd. of Media, PA and the addition of Richard M. Heller, Esq., CCIM, CES� and Joseph F. Szajnecki, CES� as consultants. 


"We remain committed to educating consumers and their advisors on section 1031 and most importantly, continue to provide the exceptional, personal services our clients have come to expect from us." stated McDonnell.


All 1031 exchange transactions will be facilitated through the Pennsylvania headquarters. 

Dealer Property or Investment Property? 

The Answer Can Cost You 

Everyone who purchases real estate considers it an investment and typically considers its potential resale value before acquiring it.  However, IRS has different views of what qualifies as an investment property.  Property held as stock in trade or primarily for sale is excluded from tax deferral treatment under section 1031.  This would include a builder's inventory of lots and spec homes as well as properties acquired with the intention of "flipping" them.  Additionally, these types of property are not considered capital assets and their sale are taxed as ordinary income not capital gains. 


When explaining this issue to property owners, we are often asked how to make these properties qualify or if holding them longer will make a difference.  When it comes to 1031 exchanges, much more important than the length of time a property is held is the intention of the owner.  What picture has been painted to IRS regarding your use of the property?  Everything from the type of mortgage used to finance the property, the types of improvements made, correspondences with your professional advisors, the insurance coverage on the property and whether or not the property was rented all help demonstrate your intention to either hold the property for investment or hold the property for sale.


                            Read More
Trending this Month...  

Making Minor Improvements to the Replacement Property Before Purchasing 

Improvement exchanges are complicated and significantly increase your transaction expenses.  In recent months, we have seen a number of Exchangers work with the seller of the replacement property to increase the contract sale price of the property and the seller makes the desired improvements.  In a few situations, with the Exchanger's authorization, 1031 CORP. loaned the seller the funds to make the improvements (after signing a note and mortgage which would be paid off at closing).  The seller's tax liability does not increase because the basis of the property is also increased and the Exchanger has the opportunity to use exchange funds to make the desired improvements.  While this is not the solution for everyone, you never know until you ask!

Wealth Building Webinars
Every Thursday, join us for one of our complementary Wealth Building Webinar Series sessions designed to help you build and preserve wealth.  Register today!
May 1st:  1031 Exchanges Made Easy 
May 8th:  1031 Exchange of Vacation Homes 
May 15th:  Structured Sales: An Alternative Tax-Deferral Strategy 
May 22nd:  Capital Gains Misconceptions and their Unexpected Tax Bills
May 29th:  Current Trends in Section 1031 
We continue to get questions about Structured Sales so we have kept this article in every issue.  See below for information on a webinar that will provide an overview of Structured Sales and discuss their many benefits.

Structured Sales Offer 1031 Alternative

Tax-Deferral Strategy Opens New Options

A "Structured Sale" is an improved version of the traditional installment sale provisions in IRC �453. Instead of receiving a lump sum cash payment upon the sale of the property, the seller receives installment payments spread over a number of years and the gain is deferred over the life of the note with taxes only due when payments are received. A Structured Sale combines the security of a cash sale with the tax benefits of an installment sale.

 Read more about Structures Sales 


Structured Sales: An Alternative Tax-Deferral Strategy

Webinar: Thursday, May 15th, 12:00 pm ET

Register Now! 

FEA Continues Efforts to Educate on Benefits of Section 1031
The Federation of Exchange Accommodators (FEA), the national trade association for 1031 exchange practitioners, continues to work to educate lawmakers of the benefits of IRC Section 1031 on real estate as well as the economy as a whole.  View FEA Benefits Paper that was distributed and highlights the support of various allied industries and associations that would be impacted by a repeal of Section 1031.  Please send an email to contact your local Congressional leaders and tell them to preserve Section 1031.   

Message from our President

Margo McDonnell

Dear Friends,

What an exciting month for 1031 CORP.!   We are excited to welcome Sanna Phinney to our team and look forward to working with Sanna and the clients of 1031 Asset Exchange.  


Hats off to Pennsylvania Sen. Mike Folmer (R-Lebanon) and Rep. Steve Bloom (R-Cumberland) for proposing a bill to bring a like-kind exchange provision to the Commonwealth. They hope to soon introduce the bill.  1031 CORP. will keep you posted on any updates.  If you are a Pennsylvania resident or own property here, please reach out to Sen. Folmer and Rep. Bloom and tell them like-kind exchanges are good for Pennsylvania and ask them to introduce the bill.  I find it ironic that at the same time our Congressional leaders in Pennsylvania recognize the benefits of like-kind exchanges to business owners and investors as well as the Commonwealth, our leaders in Washington, DC are talking about a repeal.  Seems Pennsylvania has its eye on the big picture!  


We have had recent surge in the number of requests for 1031 exchange seminars.  Our team is happy to schedule something for your office or group.  In fact, that is my favorite part of this business!  To request a seminar, please just email me.


For me personally, I recently marked my 20th anniversary with 1031 CORP.!  Time flies when you are having fun.  Thanks for letting me keep doing this job that I love!

Warm regards,  
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
President's Budget Proposes Cap on 1031 Deferral
Dealer Property or Investment Property?
Trending this Month
Wealth Building Webinars
Structured Sales Offer 1031 Alernative
Message from our President
Article Exchange

Margo McDonnell

Margo McDonnell, CES
Certified Exchange Specialist
1.800.828.1031 ext. 212
Mobile: 610.680.6896
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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

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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

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View my profile on LinkedIn

Sanna Phinney, CES
Certified Exchange Specialist
Senior Vice President
1.800.828.1031 ext. 230
View my profile on LinkedIn

Rich Heller

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

 Bettye Matthews

Bettye J. Matthews, CPA
View my profile on LinkedIn


Joseph F. Szajnecki, CES�
Article Exchange

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


Office Recovery Hits Halfway Point as Demand for Space Spreads Across More U.S. Markets


April 24, 2014


Home Sales Figures Begin to Rise Again


April 29, 2014


(Pennsylvania) State Lawmakers Offer Tax Package for Small Business

Lancaster Online 

April 20, 2014


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.
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