Forward exchanges allow a taxpayer to defer their capital gains taxes on the sale of property by moving their net proceeds into a continued investment property. Give us a call today to start your forward 1031 exchange process –877.373.1031.
Forward 1031 Exchange – Definition & Benefits
A forward 1031 exchange is a process by which you can sell real property and defer your capital gains taxes on the sale of that property. Instead of paying out those capital gains taxes, you need to move those net proceeds into a newer replacement property. The biggest benefit of a 1031 exchange is you get a avoid a potentially large tax burden (that would normally come in the form of capital gains taxes) and keep your money growing in a continued investment. 1031 exchanges also have the added benefit of stimulating the economy and encouraging investment.
Rules of a Forward Exchange
Here are the most important rules to keep in mind when conducting a forward exchange of property:
- 180 Day Timeline. You only have 180 days total (after the sale of your relinquished property) to finish your exchange. That means you need to identify and close on your replacement property within that time period to ensure a successful exchange.
- Like-Kind. All of your property in the exchange needs to be like-kind – both your replacement property and your relinquished property.
- Held For Requirement. Your property needs to be held for the right purpose as well. Property held primarily for personal use is excluded outright from 1031 treatment. You can only exchange property held for investment or business purposes.
Grand Forks Forward Exchange Company
Get out in front of your 1031 exchange and make sure you have all of your bases covered by reaching out to a qualified intermediary. Our like-kind exchange professionals have been helping taxpayers with all aspects of their 1031 exchanges for more than twenty years. We have the experience and the industry knowledge to ensure that your exchange goes off without a hitch. Contact our Grand Forks 1031 intermediaries today to start the process- 877.373.1031.