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The 45 day notification is critical to comply with or your exchange may fail. Please call us at 866-944-1031, if you have any questions on the rules below:The rules for Identification…
uses the equity residing in your current properties as collateral for the loan repayment for an amount approximate to the equity value.
A home equity line of credit (HELOC) enables property owners to use their equity as proof of debt capacity, granting them access to a credit line approximate to the equity value.
A replacement property is the property that is acquired through a 1031 Exchange.
Use this form to report income from an installment sale on the installment method.
The 95% Identification Exception is an exceptionally useful tool under the right circumstances but can present some tricky problems. You may need to identify significantly more like-kind replacement properties than the first two identification rules permit. There is no limit as to the total (aggregate) number or value of identified like-kind replacement properties permitted under the 95% exception as long as you actually acquire and close on 95% of the value identified. However, if you do not acquire and close on at least 95% of the value of the identified like-kind replacement properties the entire 1031 exchange transaction will be disallowed.
you can identify more than three (3) like-kind replacement properties as long as the total (aggregate) fair market value of all the identified like-kind replacement properties does not exceed 200% of the total (aggregate) net sales value of your relinquished property(ies) sold in your 1031 exchange. The limitation is only on the total (aggregate) identified value. There is no limitation on the total number of like-kind replacement properties.For example, if you sold relinquished property(ies) in the amount of $2,000,000 you would be able to identify as many like-kind replacement properties as you want as long as the total (aggregate) value of the identified like-kind replacement properties does not exceed $4,000,000 (200% of $2,000,000).
The 3 Property Rule limits the total (aggregate) number of like-kind replacement properties that you can identify to three (3) potential like-kind replacement properties. The vast majority of Investors today use this three (3) property identification rule.
Ensure that you have this accurate and certified business information to supply to your mortgage broker when applying for a loan.
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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!
