A.W. Van Winkle & Co is proud to announce our partnership with Elite Title Group to assist our home buyers, developers, real estate professionals, loan originators and real estate attorneys! Formed by a Mr. Joseph Manzo and led by Mr. Steve Castellano - these two powerhouse veterans have decades of experience in delivering both superb service with a fast turnaround time frame that's they envy of most in both New Jersey and New York.
Joseph and Steve Breakdown A Few Of The Most Commonly Asked Questions:
What Is A 1031 Exchange?
Section 1031 of the IRS tax code allows an investor to sell an investment property and invest in another like-kind property while deferring capital gains tax on the proceeds from the sale.
What Is The Time Frame?
The 1031 Exchange timeline begins once the investor sells the property, at which point the investor has exactly 45 days to identify a property (or properties) of equal or greater value. After the property is identified, the investor has exactly 180 days from the date of sale to purchase the identified property(s).
What Is A 'Like-Kind' Property?
According to the IRS, a like-kind property is a property of the same nature, character or class. Quality or grade doesn't matter and most real estate will be like-kind to other real estate.
What Are The Debit Requirements For The New Property?
The new property must have at least the same amount of debt as the exchanged property. If the debt on the new property is lower, the transaction will be considered a partial 1031 Exchange and the 'exchanger' will be subject to capital gains tax on the difference. This is why most investors trade up on their new investment property purchase. In essence, any investor sitting on an asset has the opportunity to trade up on a like-kind asset while avoiding capital gains tax and increase their wealth.
How Are Exchange Proceeds Handled ?
In order to complete a valid 1031 Exhcange, a Qualified Intermediary (QI), must be used to facilitate the exchange. The QI must be an independent third party and can't be affiliated with the investor, investor's attorney, CPA or any other agents.