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#1
11-15-2018, 08:04 AM
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OT: 1031 Land exchange question
Any real estate attorneys here?
Trying to sell some properties to acquire a new building and avoid capital gains as much as possible and unsure of the best possible scenario to pull the deal off and not pay massive sums to uncle Sam. This place always impresses me with the breadth of knowledge and talent, so I thought it would be worth asking while we wait to meet with someone who deals with these things.
__________________
♦️♠️ ♣️♥️ 
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#2
11-15-2018, 08:48 AM
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Sounds commercial in nature. As you may be aware, it is a "like-kind" exchange and imposes time limitations to identify the property to be acquired/acquisition. Go with someone who specializes in the area. If possible bring with you information on any properties that you intend to acquire so that the initial meeting will be meaningful/informative. Good luck.
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#3
11-15-2018, 09:28 AM
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Thank you. One piece is like/kind and the other is just land, which is where I think we will get screwed. It's ok if we know it in advance, but it adds up to a pretty good chunk once the deal is done.
Would love to exchange both pieces and include renovations on the new piece, if possible. I'm just a little worried about the timing of everything going through with two pieces and two buyers. thanks again.
__________________
♦️♠️ ♣️♥️
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#4
11-15-2018, 10:54 AM
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You MAY be ok exchanging land held for investment for developed investment property. If your tax expert thinks that may not qualify now ask if you rented it for any amount of money for a period of time if it would THEN qualify as investment property.
I was involved as a broker in a couple of exchanges of vacant land that was bought to develop and build. Before he did any building we sold the vacant land in an exchange for rental property and there was no problem qualifying under 1031 rules.
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#5
11-15-2018, 11:08 AM
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The essence is that you need to exchange properties having similar values; if you don't then you pay taxes on the delta. You also have to complete the transactions within a certain period of time.
You need a tax lawyer. (I'm not a tax lawyer or a dirt lawyer, so bear that in mind, but I do have some superficial experience with 1031 exchanges.)
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#6
11-15-2018, 11:20 AM
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I run the SF Bay Area offices of Marcus & Millichap and am happy to answer questions if you want to PM me. Alternatively, you should reach out to an exchange accommodator with your questions. Obviously your tax accountant/attorney will be able to speak to specific tax consequences as they relate to your situation.
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#7
11-15-2018, 12:38 PM
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Meeting set with real estate attorney next week and will see where to go from there.
Exchange accomidator sounds interesting, I'll pm for details as that is something I'm not familiar with and thanks again for the tips. I need the stars to align for the next 3-4 months to pull this gig off.
__________________
♦️♠️ ♣️♥️
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#9
11-16-2018, 06:24 AM
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The timing elements are critical, both the identification of the new properties to be acquired and the transaction. Start identifying possible exchange properties now before you sell your property. Get an exchange accomodator/service as this is their specialty. I second/third the idea of having a real estate attorney and/or accountant involved as well. Your investment in these professionals will be worth it.
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#10
11-16-2018, 07:02 AM
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Quote:
Not finding any quallified accommodators local here, but may be worth reaching out to use one for this considering it is two pieces of property for one with two separate buyers and different types of properties as well. Meeting with accountant today, and real estate attorney after thanksgiving. I may reach out to an accommodator as well.
__________________
♦️♠️ ♣️♥️
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