How Many Days Do I Have to Complete a 1031 Exchange?
When planning your like kind exchange, the rules are very specific. You must be well organized to successfully complete a 1031 tax exchange.
Within 45 days before or after the sale, you must identify the properties that you potentially would trade. Depending on the number of properties you own, the exchange rules determine how the allocation is done, i.e. the percentage of the sale that must be in each property.
If a person has one property in mind, he or she is smart to also include 3 or 4 additional properties. This is because if the sale on the first property falls through, and no other properties are identified, the person cannot complete a 1031. Working with a professional like Baker Retirement and Wealth Management will help you identify the best choice of properties to include.
Do I Need a 1031 Team?
Absolutely. The complex rules are easy to misunderstand. Having a team by your side to explain each step of the process is essential. This is because in the event that a mistake is made by the client, there is no leeway. If all the requirements and rules of the 1031 are not fulfilled, the client is stuck paying the taxes. A qualified team can also help you identify 1031 exchange real estate, so that you’re not scrambling to find eligible properties.
In summary, here are the steps we outline for following the rules of a 1031:
- Within 45 days before or after the sale, identify tradable properties
- Identify 3-4 additional properties in the event that the original sale falls through
- Consult a 1031 tax team, such as Baker Wealth, to assure that you have fulfilled all of the rules
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.Let’s Talk. We’re Here to Help.