1031 Exchanges: What Should I Do First?
Good communication is essential to properly determine if a 1031 exchange is right for you (or not).
For starters, you need to sit down with your family to determine if you’re even interested in the idea of trading property (rather than receiving money for the piece of property). It’s important to discuss this process with all of the key decision makers before starting a 1031 exchange. You don’t want to initiate the process until everyone is open to trading instead of an outright sale.
If your family decides that a section 1031 exchange is a potentially viable option worth exploring, you should call a tax law advisor (such as the team at Baker Wealth Management) to get an accurate idea of what your potential tax liability is. A qualified tax advisor (typically a CPA or “Certified Public Accountant”) can also help you with some of the more complex aspects of a 1031 exchange, such as:
- Qualified intermediaries
- Inheritance rules and considerations
- Family farm implications
Making an Informed Decision
Once you understand what the tax liability is, you have the information you need to make a decision about whether or not a 1031 is appropriate for your circumstances. If you choose to do a 1031 exchange, go ahead and learn about all of the steps and ensure that you can meet the deadlines. This needs to happen before the sale is finished–it’s not a discussion to have after you receive the check. You’ll want to go through this process to see if it’s appropriate when you first start thinking about selling.
If you think you may qualify for a 1031 exchange, it’s time to call the experts at Baker Retirement and Wealth Management, P.C. We have been serving the greater Evansville area (Newburgh, Boonville, Jasper, Henderson, Owensboro, Mount Vernon, and beyond) with guidance regarding tax laws, family farm inheritance tax strategy, small business accounting, and more for nearly thirty years.
Call Baker Retirement and Wealth Management today at 1-866-244-3517.Request a Free Consultation