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From our Family to Yours:
Happy Holidays and Happy New Year!
2012 Christmas Dinner
Back Row:  Bill Cotter (Founder and Advisor), Jean Cotter, Rich Heller (Consultant), Margo McDonnell (President), Martin McDonnell, Joe Szajnecki (Consultant), Jeremiah LoCascio.  Front Row: Bettye Matthews (Consultant), Sue Umstead (Senior Vice President), Marissa LoCascio (Senior Exchange Officer).


Structured Sales Offer 1031 Alternative

Tax-Deferral Strategy Opens New Options

A 1031 exchange is an excellent tax-deferral strategy that helps business owners and investors build and preserve wealth. Unfortunately, not all assets qualify for 1031 treatment and some sellers no longer wish to reinvest in other like-kind property.


A "Structured Sale" is an improved version of the traditional installment sale provisions of 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.


Unlike a traditional installment sale, the Structured Sale requires only minimal cooperation from the buyer at the time of sale, with no ongoing involvement. In an installment sale the Seller must rely on the buyer's financial   ability to make the future payments, while in a Structured Sale payments are secured by a third-party assignment company, similar to a structured settlement. The Structured Sale also allows the Seller to customize the payment stream to maximize their benefits while receiving a pre-tax guaranteed rate of return on principal.


Examples When a Structured Sale May Be Beneficial:

  • Personal residence is sold for a gain larger than the primary exclusion of $250,000 for single taxpayers and $500,000 if married, filing jointly.

  • Sale of a business use or investment asset but Seller wishes to trade down in value and split his funds between a 1031 exchange and a structured sale.

  • Seller does not want to acquire another property.

  • Vacation homes that fail to meet the safe-harbor provided by section 1031 regulations.

  • Sale of goodwill or going concern of a business which is never eligible for a 1031 exchange.

  • Coupled with a 1031 exchange or without, can help retiring business owner defer gain when selling and   provide a steady income stream.

  • Transfer of non-publicly traded stock or a partnership interest which is never eligible for a 1031 exchange.

  • Rescue a failed 1031 exchange due to the inability to identify replacement property or acquire the identified property. On the 46th or 181st day, the structured sale method could be taken if properly planned in advance.


Additional Benefits:

  • The deferred gain could keep the seller in a lower tax bracket and possibly avoid the Alternative Minimum Tax (AMT), Pease Limitations, Personal Exemption Phase-outs and 3.8% Medicare Contribution Tax on   unearned income reducing his overall tax liability.

  • Can work with the sale of real property as well as personal property assets.

  • Qualifies for deferral of Pennsylvania income tax.


There are a few situations where a Structured Sale has minimal benefits and may not be advisable:

  • The sale of inventory;

  • Most of the gain is depreciation recapture under section 1245;

  • The property is highly leveraged; or

  • There is an immediate need for cash, although it is possible to structure an arrangement that would allow a taxpayer to borrow against their funds without triggering a taxable event.  

Wise investors and business owners have used structured sales and 1031 tax-deferred exchanges to help accomplish their investment and business objectives. With the assistance of their advisors, the sky really is the limit.


To learn more, contact one of our Exchange Officers.


 Message from our President

Margo McDonnell

Dear Friends, 
I hope everyone is enjoying the Holiday Season.  What a great year this has been for 1031 CORP.!  As we wind down 2013, we want you to know we are truly grateful for your business and loyalty.   
We anticipate the number of 1031 exchange transactions will continue to pick up and the residential and commercial real estate markets to stay strong.  We look forward to helping you and your clients take advantage of the benefits of section 1031. 
Although structured sales are an alternative to 1031 exchanges, we wanted to share information on them because 1031 exchanges are not always the best solution for every situation. We think they provide a viable option for many that don't want to buy replacement property, are trading down or selling an asset that does not qualify for tax-deferral under section 1031. As my dear friend said, they are like a "real estate pension" for the long-term landlords that want to retire.  Just another option the Exchange Team at 1031 CORP. can offer our clients.
Happy Holidays! 
Best Regards,
Wealth Building Webinars
webinar Join us for our complementary Wealth Building Webinar Series designed to help you build and preserve wealth.     
Article Exchange

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


Zillow Sees Home Price Appreciation Coming Back To Historic Norms 

Inman News

December 19, 2013      


Experts Looking Forward to Promising 2014 


December 12, 2013


Real Estate: Look for Value in 2014 

CNN Money

December 9, 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.
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
Structured Sales Offer 1031 Alternative
Message from our President
Wealth Building Webinars
Article Exchange

Margo McDonnell

Margo McDonnell, CES
Certified Exchange Specialist
1.800.828.1031 ext. 212
Mobile: 610.680.6896
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Sue Umstead, CES 
Certified Exchange Specialist
Senior Vice President
1.800.828.1031 ext. 208
Mobile: 610.755.8520

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

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Rich Heller

Richard Heller, Esq., CCIM, CES
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 Bettye Matthews

Bettye J. Matthews, CPA
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Joseph F. Szajnecki, CES�
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