Get detail what is trending in 1031 exchange Industry. Read about key points to remember regarding 1031 Exchanges. For complete understanding terminology of 1031 exchange visit us at 1031sponsors.com

1. 1031 Exchanges:
PRESENTED BY
Angilina Taylor
Exchange Specialist®
1031 sponsors.com

2.  Exchange Specialist®
 Over 15 years in 1031 industry
 Involved in exchanges of various size
and complexity
ABOUT My Company

3.  Current 1031 trends
 Anticipated 1031 activity over next decade
 Quick overview of 1031 exchanges
 Using your 1031 knowledge to your advantage
 Selecting a Qualified Intermediary (QI)
 FAQ 1031 exchange
TODAY’S in 1031 Exchange
exchang

4. WHAT IS A 1031 EXCHANGE?
A 1031 exchange (IRS Code Section 1031) gives
an option to the investor by reinvesting the
proceeds from the sale of investment property
(known as the “relinquished property”) into qualified
replacement property to defer capital gains tax.
Not for primary residences, flips or most vacation homes.
1031 EXCHANGE

5. 1031 BENEFITS
 Immediate Tax Avoidance
 Time Value of Deferral
 Increased cash flow/Income
 Increased purchasing
power
 Increased ROI
 Less Management
 CONSOLIDATION
 DIVERSIFICATION
 Future conversion to
primary residence or
vacation home
 Possible elimination of gain

6. The Power of a 1031 Exchange

7. CAPITAL GAINS*
 20% for taxpayers with ordinary incomes exceeding
$400,000 ($450,000 for married taxpayers)
 15% for incomes more than approx. $36,000 ($71,000
for married taxpayers) and less than $400,000
($450,000 for married taxpayers)
 0% for incomes less than approx. $36,000 ($71,000 for
married taxpayers)
*Consult tax advisor to determine actual tax rates.
TAX FACTS AND RATES

8.  Each state has different rules regarding exchanges.
 Pennsylvania generally does NOT recognize a 1031
exchange.
 Many states simply follow the Federal Code or have adopted
similar regulations
 Some states have special requirements such as the
replacement property must be located within the state
STATE INCOME TAX

9. Triple Net PROPERTIES
 Investors are taking advantage of current CRE
market opportunities and historically low interest
rates to leverage into several replacement
properties
CURRENT TRENDS

10. SHORT EXCHANGE PERIODS
 Exchangers are lining up their replacement property
and are ready to acquire it immediately after
conveying the old property to a buyer
 Average exchange is now completed within 45 days
(down from average of 180 days just two years ago)

11.  More and more investors are finding the ideal
replacement property before lining up a buyer
 Must be structured several weeks in advance
REVERSE EXCHANGES

12. EXCHANGING PROPERTY WITH NO GAIN
 Investors are exchanging properties with little or no
gain, maybe even selling at a loss, to avoid costly
depreciation recapture
CURRENT TRENDS

13.  Examples of like-kind real estate
 , rental house
 Office building, warehouse, shopping center
 Land
 Tenant-in-Common (TIC) interest
 Conservation easements, utility easements
 Leasehold interest of 30 years (including options)
LIKE-KIND EXAMPLES

14. One of the major requirements of Section 1031 is that
the replacement property must be like-kind to the
relinquished property. In other words, both
relinquished and replacement properties must be
similar in nature, though they may not serve the
same purpose. For example, using a 1031
exchange, you can exchange any investment
property (rental, industrial, multi-family, etc.) for
another and defer up to 100% capital gains tax.
LIKE-KIND DEFINED

15.  QI acts as “middleman” to facilitate an exchange
 Exchanger cannot have access to exchange
proceeds
 Time Periods:
 Replacement Property* must be identified within 45-Day
Identification Period
 Replacement Property must be acquired within 180-Day
Exchange Period
*Title must be held in the same name as relinquished property
10 31 exchange deadlines

16.  Exchange must be set up (and 1031 docs signed)
before title passed to buyer
 To maximize deferral, replacement property must
have equal or greater VALUE and EQUITY.
1031 ADDITIONAL REQUIREMENTS

17.  Your QI is your partner throughout the exchange
 A QI handles the mandatory mechanics of a
1031 exchange for an investor.
Have following responsibility
 Acquire relinquished properties from the taxpayer.
 Transfer the relinquished property.
 Acquire the replacement property.
 Transfer the replacement property to the taxpayer
Selecting your QI

18.  1031 exchanges are a great wealth accumulation
vehicle.
 Great way to accomplish long-term objectives
 Excellent estate planning tool
 Creates many opportunities to grow your business
 The more you know, the more you will benefit.
 1031 sponsors.com. can help!
SUMMARY