Like Kind Property for 1031 Exchanges
Does your property qualify for tax-deferred like-kind exchange treatment under Section 1031 of the Internal Revenue Code ? There are many factors that figure into this designation, all of which will be touched upon by this article.
Once the Investor has determined if their assets are qualified use properties - which is relatively simple - the next step is to determine if the relinquished properties and replacement properties qualify as "like-kind" or mutually held for rental, investment or use in a business. Likewise, if qualified use property requirements and like-kind replacement property tests are met, personal property may also qualify for like-kind exchange treatment; however, when it comes to like-kind designation, more restrictive and much more narrowly defined that the standards imposed upon the exchange of real property.
Property must in all instances be like-kind; real and personal properties cannot be exchanged for one another. An investor must exchange personal property for personal property and real property for real property only. Properties do not have to be located within the same state, but must be within the confines of the United States; foreign (non-U.S.) property can only be traded for foreign (non-U.S.) property. An investor cannot exchange domestic property for foreign (non-U.S.) and vice versa.
Disclaimer: 1031 exchange made simple does not guarantee the performance of the QI's in our referral network and we can not be held liable for any misrepresentations or mistakes in regards to a 1031 exchange by one of the QI's that we refer to you. 1031 Exchange made simple does not provide tax advice nor can we make representations regarding the tax consequences of an exchange transaction. 1031 Exchange made simple is a 1031 QI Referral Network. 1031 made simple is not responsible (in any way) for the performance, creditability, and financial condition of any QI in our network. In this new economic environment it is imperative that all potential 1031 exchange customers do their own due diligence and research on any QI that they may use, on a 1031 exchange. Please verify and check the validity of the Bonding and Insurance of your QI. It may be wise to have your 1031 exchange accounts set up as separate, individual customer accounts. Our web site is to be used as a information based web site only. All parties doing a 1031 exchange must consult their tax advisors or attorney for this information.
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