WHAT IS A 1031 EXCHANGE?

The Sully Group has a track record in helping clients through some of the most complicated exchanges. We break down many of the steps and frequently asked questions below. We have seen the 1031 Exchange process to be a very effective and powerful vehicle that can yield tax benefits and positive return on investment. If you feel like a 1031 Exchange transaction would be a benefit to you, we invite you to set up a virtual meeting with us today.

The 1031 Exchange is a way to defer tax liability on income from the sale of real estate if you intend to reinvest the income in another real estate purchase within a specified amount of time. By following the guidelines established by the IRS Section 1031, any gains you make on the sale of the original property are not subject to immediate taxation as capital gains. This is because selling your existing property and acquiring a new property is considered an exchange. You can defer capital gains taxes as long as you continue to exchange every time you sell the property in the future.  There is more than one type of 1031 Exchange. The most common type is called a "Delayed" 1031 Exchange. To give you some insight on a typical transaction, we have broken down the steps for a "Delayed" 1031 Exchange below.

Keys To The New Place

PLAN THE TRANSACTION

Set up a meeting with our team to discuss your specific needs. After listening to your investment objectives, we'll determine the best way to structure your transaction and help estimate the amount of potential capital gains taxes you'll save.

Men with Calculator

PURCHASE & SALE AGREEMENT

The exchange often begins with a standard purchase and sale agreement. The agreement should contain language which establishes the exchanger's intent to exchange and obtains the buyers consent to cooperate. Our team will assist to convert this "sale" transaction into an exchange with the use of specialized documentation.

RELINQUISHED PROPERTY

Once you have decided to perform an exchange, we will help you prepare the exchange documents. At closing, the relinquished property will be sold to the buyer. The proceeds are then held for the acquisition of the replacement property.

Door

REPLACEMENT PROPERTY

After closing the relinquished property, the exchanger has 45 days to identify the replacement property and 180 days to complete the exchange. The Sully Group will help deliver the documents needed to complete the exchange to the closing agent. Once the purchase is closed, the exchange is complete.

Done Deal

CONNECT WITH US

FILL OUT THE CONTACT FORM BELOW AND SOMEONE FROM OUR TEAM WILL REACH OUT TO YOU!

TO REQUEST A MEETING OR VIRTUAL CONSULTATION​,

PLEASE CALL

OR EMAIL US:

Gary@TheSullyGroup.com

(714) 665-1101

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The Sully Group| 8502 E Chapman Ave, Suite 350 | Tustin, CA 92869-2461 | 714-665-1101| Email: Gary@TheSullyGroup.com

© 2021 Sully Real Estate & Land, Inc., Dba The Sully Group, DRE No. 02087936

Broker/Agent has not independently verified and, therefore, makes no representation regarding any information contained herein. Any numerical statements regarding square footage, room dimensions, and/or lot size are approximations only and have not been verified by seller or broker. 

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