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*This website is for informational purposes only and the material contained herein does not constitute tax, legal or accounting advice. Neither Sun Trust Title, LLC nor any of its agents, employees, etc. are in the business of offering such advice. Legal services are offered and provided by the Law Offices of Henry Crouser, P.A. and tax services are offered and provided by Alan Davidson CPA P.A. Additionally, the information contained herein, by itself, should not be construed as an offer for the sale or purchase of insurance products, or the solicitation of legal, tax or accounting services. Always consult with an attorney, accountant, or financial advisor before making any legal, tax, or financial decision.

 

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1031 EXCHANGE SERVICES

At Sun Trust Title, we have established a network of 1031 exchange professionals and qualified intermediaries that can handled 1031 exchange transactions in an efficient and effective manner.

Section 1031 of the Internal Revenue Code permits investors to defer the payment of tax on the gain from the sale of property held for productive use in business, trade or investment, provided that the property is exchanged for a “like kind” asset or assets. The section of the code creates “safe harbor” that permits the taxpayer to have assurance that the transaction will permit the deferral of the capital gain tax payment

 

Eligible Property

 

Property held for productive use in a trade or business or for investment may be exchanged for other "like-kind" or "like-class" property under IRC 031(a)(1). (E.g., Real property would have to be exchanged for real property).

 

Timing of Exchange

 

Generally, at the time of the sale of the "relinquished property" the "Seller" or "Exchangor," does not yet know what property he or she wants to acquire or the closing on the replacement property cannot be accomplished simultaneously with the sale of the relinquished property. In that case, an "Intermediary" is used to defer the exchange and hold the sales proceeds from the sale of the relinquished property.

 

Identification of Replacement Property

 

If it is a deferred tax exchange, the Exchangor must identify the replacement property within 45 days of the settlement on the relinquished property. The Exchangor can identify up to three (3) possible replacement properties. Identification is given to the Intermediary.

 

Closing on Replacement Property

 

The Exchangor must close on the purchase of the replacement property within 180 days of the closing on the relinquished property or the due date on the tax return for the Exchangor.

 

Services Provided

 

Exchange Intermediary facilitates the 1031 deferred tax exchange by preparing all the necessary documents for the transaction. Exchange Intermediary holds the net sales proceeds on behalf of the Exchangor and ensures that the funds are available for settlement on the replacement property. Exchange Intermediary and the lawyers who draft the documents do not provide tax advice as to the appropriateness of a 1031 exchange. That advice must come from a tax attorney or certified public accountant.

 

At Sun Trust Title, we have established a network of 1031 exchange professionals and qualified exchange intermediaries that can handle 1031 exchange transactions in an efficient and effective manner. Contact us today to learn more about the potential benefits of 1031 exchanges and how the they may defer taxes on the sale of your property.