Las Vegas 1031 Exchange

The 1031 Tax Deferred Exchange is a brilliant tax-saving mechanism. When all elements are right, it’s a great way to build a lot of pre-tax wealth. Compentency is of utmost importance when doing a 1031 exchange. For experienced representation, contact a Welcome Home Nevada agent today. We will help you identify the best Las Vegas or Henderson investment properties and oversee the process from start to finish. An experienced Realtor® can make all the difference.

Perhaps the greatest mistake investors make is not following the rules given by the IRS. Here is a checklist of the basic rules for a 1031 exchange:

Qualified Intermediary

A qualified intermediary must oversee the exchange. The intermediary acts as a neutral third party, making sure all exchange guidelines are met. The intermediary also holds all the monies and makes disbursements, thus making the transaction clean and without question.

Property Restrictions

You must exchange across or up. The loan amount and purchase price of the new property must be equal to or greater than that of the property being exchanged. If there is a balance remaining, a lesser loan amount or purchase price, the monies are considered boot and you will pay gains on the difference.

Multiple Properties

You can exchange from one property into multiple properties, given the total loan amounts and purchase prices are equal to or greater than that of first property. You cannot exchange from multiple properties into a single property.

Time Restraints

You have 45 days from the sale of the original property to identify which property you will be exchanging into. You have 180 days to get the deal closed.

Property Restrictions

The property must be used as an investment property. While it would be great to exchange owner occupied residences to avoid short term gains, the IRS will not allow it.

Ownership Restrictions

You must own the investment property at least one year and a day prior to exchanging it.

Title Restrictions

You must hold title to the new property the same way you held title to the previous property.

You should always consult your accountant or tax attorney to make sure a 1031 exchange is the best choice for your portfolio.

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