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Archive for the 1031 Exchange Category

Deferring Capital Gains Tax on Sale of Farm and Agricultural Property Via 1031 Exchange Requires Advance Planning

Deferring Capital Gains

Because farmers contemplating retirement have often owned their properties for several decades, their adjusted tax basis in their farm property is often quite low.  Using a 1031 exchange of like-kind property can indefinitely defer the tax if the investment property is held until death.  Like-kind property does not have to be another farm.  The IRS like-kind definition includes any real […]

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Constructive Receipt and the Validity of Your 1031 Exchange

Constructive Receipt

An investor wanting to defer capital gains associated with the sale of business or investment real estate, will plan to take advantage of an IRC Section 1031 exchange of like-kind property.  In the forward-delayed exchange, the most commonly used 1031 exchange, the sale proceeds from the relinquished property must not be received either actually or constructively by the seller (exchanger). […]

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Exchange Expense:  How to Keep a 1031 Completely Tax-Deferred

Tax Deferred 1031 Exchanges

In order for an investor to have a completely tax-deferred 1031 exchange, he must use all of the cash from the sale of the relinquished property.  Many of the sale-related expenses and certain replacement property purchase costs can be paid with exchange funds without creating a tax liability.  Non-exchange expenses require payment with the investor’s own funds. Non-Allowable Expenses and […]

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1031 Exchanges for LLCs: Are Members Allowed to Go Their Separate Ways?

Tax Deferred 1031 Exchanges

When a multi-member LLC contemplates selling a property and wants to do a 1031 exchange, sometimes one or more members may either want to invest in a different 1031-qualified replacement property or to discontinue their real estate investment, take their proceeds and pay their taxes. If other members of the LLC want to do a 1031 exchange, a drop and […]

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Considering a Tax Deferred Exchange (1031 Exchange)? You Need a Qualified Intermediary [Video]

Tax Deferred

Considering a tax deferred exchange (1031 Exchange)? The IRS requires that you have a qualified intermediary to facilitate the sale and purchase process. Learn more from Attorney, Dean (Mac) Nichols of Layman & Nichols, PC. Be sure to contact us at Layman & Nichols, PC if we can help facilitate your next 1031 Exchange.

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1031 Tax Deferred Exchange – Explained [Video]

1031 tax deferred exchange

By Dean ‘Mac’ Nichols, Attorney At Layman & Nichols, we often work with clients on tax deferred exchanges. In this video, Mac Nichols talks about the benefits of a 1031 exchange, often known as a tax deferred exchange. These benefits include: • allows you to sell real estate or other property and defer the capital gain by reinvesting it in other property, […]

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House Flipping and 1031 Exchanges Do Not Always Mix

house flipping

By Dean ‘Mac’ Nichols, Attorney House flipping may be considered a type of real estate investment by those who do it, but did you know that it generally doesn’t qualify for 1031 treatment? IRC Section 1031(a)(1) states that “stock in trade” property, or property “held primarily for sale” is explicitly excluded from qualifying as a 1031 exchange. Property held primarily for […]

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1031 Exchanges: Qualified Intermediary

Oral Contracts in the Commonwealth of Virginia

By Dean ‘Mac’ Nichols, Attorney A qualified intermediary is essential to completing a 1031 exchange, by directing the process and ensuring that the IRS regulations are complied with. A qualified intermediary is simply the independent party who helps others with a tax deferred 1031 exchange. This person cannot be the taxpayer (buying or selling the property), or a disqualified party (specifically […]

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1031 Exchanges: Forward or Reverse

Section 8 Housing

By Dean ‘Mac’ Nichols, Attorney   A 1031 tax-deferred exchange is a real estate exchange that gives investors the ability to defer the capital gains tax typically associated with selling real estate held as an investment or used for business purposes. In order to qualify as a deferred exchange, there must be an exchange of real estate for real estate as […]

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1031 Tax Deferred Exchange

1031 tax deferred exchange | Layman Nichols attorney

By Dean ‘Mac’ Nichols, Attorney What is a tax deferred exchange? A tax deferred exchange is a method by which a real estate owner trades one property for another without having to pay any federal income tax on the transaction. In an ordinary sale, the property owner must pay tax on any gain from the sale of the property. But in […]

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