45-Day IDs that Make or Break a 1031
Tips to Prevent a Costly Mistake
One of the most important requirements of a successful 1031 exchange is the proper identification of replacement property within 45 days of when the relinquished property is transferred to a buyer. While this requirement seems simple to satisfy, for many, it creates a great deal of stress for a variety of reasons. Following are the most common issues that pop up and tips on how to avoid unnecessary worry.
Maximizing your Time
There is no doubt that 45 days fly by but there is no reason why you should wait until the relinquished property settles before starting to look for desirable replacement property. On average, there is at least 60 days between the date an Agreement of Sale is signed and when a property settles. Utilize that time to begin searching for replacement property. The replacement property can be acquired immediately after the relinquished property closes.
Changing your Identification
We all change our mind sometimes and there are occasions when the perfect property comes on the market after an identification is submitted.
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CAUTION! You May Need to File an Extension
The exchange period begins upon the sale of the first relinquished property and ends at midnight on the earliest of either the 180th day or the due date of your return, including extensions, for the tax year in which the exchange was initiated. If your 180-Day Exchange Period deadline falls AFTER the due date of your return and your exchange is not or will not be completed before the filing deadline, you MUST file for an extension of time. This extension will provide you with the benefit of the full 180 days to complete your exchange and an additional six months to file your return.
Filing your return before your exchange is complete WILL automatically end your 180-day exchange period.
Individuals must file Form 4868 on or before your normal filing date to obtain the automatic extension of time. For more details regarding return extensions and applicable taxes, please consult your tax advisor. If this form is not properly filed, you will automatically end your exchange period and any replacement property acquired will not qualify for the exchange thus creating a taxable event. Once your return is filed, you cannot amend your return to include the exchange or obtain an extension of time to complete the exchange. You will be required to report the sale as a taxable event.
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Don't Forget!
IRS has extended the tax filing deadline this year to Tuesday, April 17, 2012. For more information view Publication 509 from the IRS.
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Trending this Month...
Oil and Gas!
We have had a rash of calls inquiring about royalties and bonus payments. When it comes to Marcellus Shale, the answer depends on the terms of your agreement with the gas company. Click for more information or call 1.800.828.1031. Note you can always acquire oil and gas royalties as replacement property.
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1031 Seminars
Join us at our next complimentary seminar to learn more about 1031 exchanges and their many benefits. You must register in advance. Refreshments will be provided.
1031 EXCHANGES MADE EASY
Tuesday, March 20th, 6:30 - 8:30 pm
1031 CORP., 100 Springhouse Drive, Suite 203, Collegeville, PA
REGISTER NOW by emailing RSVP@1031CORP.com with your contact information! To schedule a 1031 seminar or sales workshop for your group, please call Margo McDonnell, CES® at 1.800.828.1031 ext. 212 or send her an email at margo@1031CORP.com.
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Lunch & Learn Webinars 
Join us for one of our complimentary Lunch & Learn Webinar Series webinars designed to provide quick educational sessions to help you build and preserve wealth. Grab your lunch and log on to a computer near you!
Beginning in March, we will hold our 1031 Exchanges Made Easy webinar the first Thursday of every month!
1031 Exchanges Made Easy
Thursday, March 1st, 12:05 - 12:50 pm EST
This webinar will provide an overview of 1031 tax-deferred exchanges and their many benefits. We'll also review the requirements of a successful exchange. Register Now!
1031 Guide for Real Estate Professionals
Thursday, March 15th, 12:05 PM - 12:50 pm EST
This webinar explains the benefits of 1031 exchanges for REALTORS® and offers tips on how to use 1031 as an effective marketing tool. You will definitely leave with ideas you'll want to implement! A brief overview of 1031 is also included.
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2011 Exchange Reporting Guide
Download our 2011 Exchange Reporting Guide here for information on reporting your 1031 exchange, when to file your tax return, when to file for an extension and other important tax reporting assistance!
Helping to Simplify the Reporting of your 1031 Exchange!
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Message from our President
 | | Margo McDonnell |
Dear Friends,
I am thrilled to share some wonderful news about Marissa! Marissa and her husband, Jeremiah, are expecting their first child at the end of July! We wish them the very best and could not be more excited for them. Please feel free to drop Marissa a note.
Everywhere you turn lately, people are out talking about trading up. People trade up bikes, clothes, jobs and even homes. This past weekend, I saw a television commercial encouraging viewers to trade up your current car for a Lincoln as part of their Exchange Program. They must have heard about the success investors are having with 1031 exchanges! Now is a great time to trade up your investment properties. Interest rates are even lower than this time last year which is putting more and more properties into our price range. Properties that were unaffordable just a few years ago suddenly are making trading up a reality. If you are thinking about making a move and want to discuss your situation, just give us a call and we'd be happy to help.
Here's hoping our non-existent winter stays that way!
Best regards,
Margo
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About 1031 CORP.
Serving as a nationwide qualified intermediary for 1031 tax-deferred exchanges since 1991, 1031 CORP. strives to provide a superior exchange experience for our customers and their advisors. We provide our customers with enhanced security of funds, knowledgeable exchange professionals and a commitment to keep the exchange process simple for our customers and their advisors. Every member of the exchange team is a Certified Exchange Specialist® and has the experience and expertise to facilitate even the most complex exchange transaction, including reverse, improvement and personal property exchanges. Additional information can be found at www.1031CORP.com.
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Margo McDonnell, CES®
Certified Exchange Specialist®
President
1.800.828.1031 ext. 212
Mobile: 610.680.6896
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Sue Umstead, CES®
Certified Exchange Specialist®
Senior Vice President
1.800.828.1031 ext. 208
Mobile: 610.755.8520
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Marissa LoCascio, CES®
Certified Exchange Specialist®
Senior Exchange Officer
1.800.828.1031 ext. 210
Mobile: 610.742.4351
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Richard Heller, Esq., CCIM, CES®
Consultant
1.800.734.1031
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Bettye J. Matthews, CPA
Consultant
1.800.680.1031
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Joseph F. Szajnecki, CES®
Consultant
1.800.734.1031 |
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Article Exchange
If you have an article you would like to share, please forward it to Margo McDonnell,CES® and we'll include it in next month's reading list.
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"LIKE" 1031 CORP. on Facebook to receive a daily tidbit on 1031 exchanges and related topics.
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