By the way, a client of mine has just initiated a Reverse Starker like-kind tax deferred exchange, an IRS approved real estate investment tool.
If you'd like to explore the world of real estate investing, please give a call at 301-980-4085. My office number is 301-986-1001, ext. 7319
The nuts and bolts:
The tax deferred exchange, sometimes referred to as the Starker exchange or the 1031 like-kind exchange has two aspects, both approved and both part of the IRS tax code: Forward and Reverse.
The Forward envisions the sale of an investment property (not primary residence and used for investment) and the purchase of another investment property (like kind...that is to say, the same style or function as the sold property), and the orderly and timely exchange, title for title within the appropriate time period. It's a tight window of opportunity, made shorter after the initial "Starker" exchange which created this opportunity, many years ago.
An example might be the sale of a rental condo or townhouse in town and the repurchase of a rental condo at the beach, where a student condo (purchased for a student during college and grad school whose price appreciated enough to warrant some concern for taxable liability, or a first time condo purchase after college where the owners moved out to a larger residence and rented the apartment many years ago.
The Reverse envisions the purchase of the property to exchange to and the sale at some date 180 days from settlement of the property to be traded from. In either case, the properties have to be identified within 45 days of the purchase settlement, there has to be a qualified "intermediary" or "facilitator" (often a knowledgeable title attorney) and a paper trail to document the intention and follow through for the IRS.
In the course of my 27 years of real estate, I have worked through both of these exchanges. I am not an expert nor am I a qualified intermediary nor a facilitator. I do know about the value and mechanics of these exchanges enough to make recommendations to appropriate specialists, several of each category.
The nuts and bolts:
The tax deferred exchange, sometimes referred to as the Starker exchange or the 1031 like-kind exchange has two aspects, both approved and both part of the IRS tax code: Forward and Reverse.
The Forward envisions the sale of an investment property (not primary residence and used for investment) and the purchase of another investment property (like kind...that is to say, the same style or function as the sold property), and the orderly and timely exchange, title for title within the appropriate time period. It's a tight window of opportunity, made shorter after the initial "Starker" exchange which created this opportunity, many years ago.
An example might be the sale of a rental condo or townhouse in town and the repurchase of a rental condo at the beach, where a student condo (purchased for a student during college and grad school whose price appreciated enough to warrant some concern for taxable liability, or a first time condo purchase after college where the owners moved out to a larger residence and rented the apartment many years ago.
The Reverse envisions the purchase of the property to exchange to and the sale at some date 180 days from settlement of the property to be traded from. In either case, the properties have to be identified within 45 days of the purchase settlement, there has to be a qualified "intermediary" or "facilitator" (often a knowledgeable title attorney) and a paper trail to document the intention and follow through for the IRS.
In the course of my 27 years of real estate, I have worked through both of these exchanges. I am not an expert nor am I a qualified intermediary nor a facilitator. I do know about the value and mechanics of these exchanges enough to make recommendations to appropriate specialists, several of each category.
Call me if you would like further information. Cell: 301-980-4085. Office: 301-986-1001, ext. 7319
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