Handling Inherited Investment Real Estate in a 1031 Exchange

In the realm of estate planning, questions frequently arise regarding the disposition of inherited investment real estate, especially concerning the application of IRC Section 1031 exchanges. This article explores the implications for heirs who inherit such properties and the potential tax consequences they face. Step-Up in Basis and Its Impact Consider a scenario where Grandpa […]

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What is “Substantially the same” in a 1031 exchange, and what is the 75% rule?

When doing a 1031 tax deferred exchange, the IRS requires that a taxpayer acquire replacement property that is “substantially similar” to the replacement property that they had “identified” during their 45 day ID period. The replacement property cannot be different in nature or character from what they had described on their identification document. Typically speaking, […]

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Domestic and Global 1031 Exchange Property Rules Explained

1031 Exchange Rules for U.S. and Foreign Properties

A 1031 exchange allows investors to defer capital gains taxes by reinvesting the proceeds from selling an investment or business-use property into another like-kind property. It’s essential to understand the distinct rules regarding domestic and foreign properties when conducting a 1031 exchange. Understanding Replacement Property Rules Domestic Properties: A U.S. property can only be exchanged […]

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Understanding Basis in a 1031 Exchange

Understanding Basis in a 1031 Exchange

When discussing 1031 exchanges, the concept of ‘basis’ becomes crucial. But what does it mean in the context of a 1031 exchange? Essentially, the basis of the replacement property acquired in a 1031 exchange is the same as the basis of the relinquished property, subject to certain adjustments. This basis carries over from your old […]

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