No, you do not have to spend all of your funds. However, any amount not spent will be considered cash boot and will be subject to capital gains taxes and any applicable recaptured depreciation.
Yes. However, to have a full tax-deferred exchange all notes must be paid by the buyer and the acquired property must close within the 180 day period.
The IRS does not allow us to act as both your qualified intermediary and your attorney or tax advisor. We will work closely with your attorney and CPA to make sure your tax-free exchange goes smoothly.
As long as your property has been used for investment, you can qualify! Section 1031 of the IRS code lets you sell your property and buy a new property without paying any taxes if you simply follow the specific rules.
Between the sale and purchase, a qualified intermediary holds the proceeds of the sale of the relinquished property, prepared the legal documents and ensures that the entire process is completed within the IRS guidelines.
Per IRS rules and regulations, the taxpayer may not receive the proceeds or take constructive receipt of the funds in any way, without disqualifying the exchange.
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Plenti Financial™ is a trade name of 1031 Exchange Advantage®. 1031 Exchange Advantage™ is a trade name of 1031 EA, LLC and is not a licensed broker. 1031 EA, LLC is a division of Plenti Financial and is the accommodator for a 1031 Exchange as required by the IRS. 1031 EA, LLC does not provide, brokerage, legal or accounting services and is simply a Qualified Intermediary under the IRS code. It therefore is not providing any services other than accommodation services and clients and prospects are advised to confirm all tax, legal, accounting and real estate investment decisions with their professionals such as their accountant or attorney.
A 1031 exchange is a method of tax deferral upon the sale of investment real estate. However, the decision to pay or not pay accumulated and/or deferred taxes is up to the taxpayer, who has control over whether transactions are completed tax-deferred, or tax-free! If an exchanger should decide to continue exchanging into investment property of same or greater value for life, and never sell investment property without utilizing a 1031 exchange, no taxes would be due on any transactions, making them tax-free! Even in the event the taxpayer dies, the taxes die with him, again making the transactions tax-free! Because the choice is up to the taxpayer, we like to say taxes in an exchange are deferred, unless you choose to sell tax-free with Plenti Financial!
