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Lisa Mascaro Blog
1031 Exchange
September 20, 2016
      

A 1031 exchange is a way to buy and sell investment properties that are of "like-kind" and defer any capital gains for tax purposes.  Below is a list of things that can often go wrong in a 1031 exchange.

1. Failure to get a replacement property with equal or more debt.

2. The term, "like-kind" is rather vague.  You do not need to replace a condo with another condo, you can exchange your condo for a single family home or vacant lot if you wish.

3. Exchanges were created for investment properties so do not move right into your newly exchanged property, be patient and let it build up a rental history. 

4. The most important thing is to always consult with your CPA and attorney to see if using an exchange will even make sense for you.

5. Do not wait until after closing to call IPX 1031 Exchange Services or it will be too late for them to assist you with the exchange.  They are full service and will help you throughout the exchange process.

6.  There are 2 important deadlines not to be missed when doing an exchange.  You have 45 days after closing to identify the new property you would like to use for the exchange.  Then after that you have 135 days to close on that property.

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