1031 Exchange in Texas
Are you a 1031 Exchange investor? Are you seeking investments to help you with your 1031 in the Central Texas area? Shire Commercial does help Clients identify and purchase 1031 Exchange properties within the Central Texas area. We can find you a property within the state of Texas and specifically Austin. So, what is the 1031 Exchange , if you are new to this situation the 1031 Exchange transaction is as follows:
- 1031 Exchanges are a tax deferred solution. This offers taxpayers one of the last great opportunities to build wealth while saving on taxes.
- You can dispose of investment or business use assets. You can acquire replacement properties and defer your taxes.
To defer taxes , you must identify and
- a) Acquire “like kind”replacement property of equal or greater
- b) Purchase replacement property
- c) Reinvest all of your equity into the replacement property
- d) Obtain the same or greater debt on the replacement property
- e) Most exchanges involve multiple properties.
Debt is replaced by additional cash. Cash equity cannot be replaced by additional debt.
A 1031 exchange is rarely a swap of properties between two parties.
The 1031 Exchange Property Process
How does the process work? Here are some snippets to help you understand how it works.
- Prior to closing sale of Relinquished Property, we will help you identify a Qualified Intermediary to work with you. For a 1031 Exchange, this would require an Exchange Agreement.
- Prior to closing the sale of Relinquished Property, the Seller must assign rights under the sales contract to the Qualified Intermediary. Seller provides notice of assignment to the Buyer
- At closing net proceeds pay directly to the Qualified Intermediary (exchange funds) and are held in a separate account to purchase a replacement property.
- The Exchanger (you the seller of the previous property) has 45 days from the date the property is transfers to identify potential replacement properties thru Shire Commercial.
- The Exchanger can only acquire from a list provided of identified properties provided by their commercial real estate broker.
- The 1031 Exchanger prior to closing will notify the Qualified Intermediary to wire funds directly to the Seller. Funds can be wired additionally to the closing agent for purchase of the property.
- The final purchase must be complete by the earlier of the 180th day after transfer of the first Relinquished Property or the due date (incl extensions) for filing the Exchanger’s tax returns.
The Exchanger (taxpayer) who is selling the relinquished property would hire Shire Commercial as their commercial real estate broker.
Shire Commercial identifies the properties while helping Clients negotiate and close on a solution. Shire Commercial will recommend the intermediary for you to make your transaction as seamless as possible.