What is a 1031 tax exchange?
Here’s what 1031 tax exchanges are and how they work in this hot market.
The goal of 1031 tax-deferred exchanges is to defer all the capital gains you currently have in your home into another similar property. Once you get your home sold, you have 45 days to identify up to three replacement properties. Then you have to choose one of those and close on it within 180 days.
With the way the real estate market is right now, what happens if all three of those properties sell before you close on your current home? If you didn’t sell your house first, you should start looking for replacement properties immediately, so you’ll be ready when your home does go under contract. By the time you close on your current house, you’ll already be way ahead of the game. If you’re considering doing a 1031 exchange, you have to get ahead of the curve.
“We’re very experienced with positioning buyers and sellers correctly for 1031 exchanges.”
New inventory is coming onto the market all the time, but as quickly as it’s coming on, it’s coming off, and often with multiple offers. If your offer is contingent upon the sale of your current property, even if it’s under contract, it’s a weaker offer than others without that contingency. We’re very experienced with positioning buyers and sellers correctly for 1031 exchanges. A crucial thing to think about is the timing of when you put your home on the market and when to look for replacement properties.
If you have any questions about 1031 exchanges or want more information about how to strategically get them done in this hot market, reach out to us via phone or email. We would love to be your real estate resource.