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07-17-2008, 04:53 AM
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#1 |
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Registered User
Join Date: Jul 2008
Location: Huntington Beach, CA
Posts: 31
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Tax Advice Needed: 1031 Exchange Commercial Real Estate
Just sold $3Million piece of commercial real estate. 2008
Buying another piece that is in the ballpark of $3Milllion. That project is 1+ years behind its intended schedule and cannot purchase until then. What is my deadline for this exchange? Are extensions granted? How do I go about getting these extensions? Any suggestions? |
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07-17-2008, 09:59 AM
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#2 |
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Harold Hecuba Productions
Join Date: Sep 2004
Location: New Berlin, Illinois
Posts: 934
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You have 45 days to identify the property (sounds like you already have), and 180 days to complete the exchange (receive the new property). See Publication 544 (http://www.irs.gov/publications/p544/index.html) for more information.
__________________
jb IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment). |
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07-17-2008, 10:15 AM
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#3 | |
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Registered User
Join Date: Jan 2007
Posts: 1,084
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Quote:
I'm confused. You can't purchase the property until it's one year behind schedule? Do you have to do time travel for that?
__________________
"Wealth is the slave of a wise man. The master of a fool." -- Seneca |
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07-17-2008, 01:28 PM
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#4 | |
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Registered User
Join Date: Jul 2008
Location: Huntington Beach, CA
Posts: 31
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Quote:
Sorry. I was trying to keep it simple. What I meant is that the purchase cannot go through until construction is complete on the property that I am trying to exchange for. Due to delays, it is 1.5+ years behind schedule and I was looking for a way to shelter the money until I reinvested it. |
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07-17-2008, 07:06 PM
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#5 |
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Harold Hecuba Productions
Join Date: Sep 2004
Location: New Berlin, Illinois
Posts: 934
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I have never worked with these, but there is a vehicle called a TIC (Tenants-In-Common) that can be used for 1031 Exchanges. Essentially, if I understand it fully, you participate in a consortium that owns properties (like a mutual fund, more or less) and the participation in the consortium qualifies for the 1031 exchange. You park your money there until your next property becomes ready (in theory). I'd be concerned about liquidity of shares, for starters.
Anyone have any additional insights to offer?
__________________
jb IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment). |
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