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Message
1031 Exchange
Posted on 6/10/25 at 8:35 am
Posted on 6/10/25 at 8:35 am
Im in the preliminary stages of exploring a 1031 exchange purchase for capital gains relief.
From what I gather, 45 days after selling, you have to identify up to 3 properties and close within 180 days. Is that correct?
Would a hunting parcel count as a 1031 if I "want the property to appreciate for potential future gains" be enough to suffice? I wouldn't be logging or leasing any of the new parcel.
Also, what if the new land was a higer pric3 than the sold land? Would it still provide capital gains relief and I'd just cover the rest of the balalnc3 on the new property?
I was hoping to spread stuff out over 2-3 years to minimize capital gains burden, but it doesn't look like that will be feasible. Im not worried about closing times, loan funding, etc. Both transactions would be stroking a check.
From what I gather, 45 days after selling, you have to identify up to 3 properties and close within 180 days. Is that correct?
Would a hunting parcel count as a 1031 if I "want the property to appreciate for potential future gains" be enough to suffice? I wouldn't be logging or leasing any of the new parcel.
Also, what if the new land was a higer pric3 than the sold land? Would it still provide capital gains relief and I'd just cover the rest of the balalnc3 on the new property?
I was hoping to spread stuff out over 2-3 years to minimize capital gains burden, but it doesn't look like that will be feasible. Im not worried about closing times, loan funding, etc. Both transactions would be stroking a check.
5
Posted on 6/10/25 at 8:40 am to El Segundo Guy
What’s the property you’re looking to give up?
Theres no “relief” from cap gains, it’s a deferral. New property needs to be equal or greater value.
Theres no “relief” from cap gains, it’s a deferral. New property needs to be equal or greater value.
Posted on 6/10/25 at 8:45 am to El Segundo Guy
If both properties qualify for the 1031, the capital gain you are deferring would roll into the new property. You’ll have to use a qualified intermediary to ensure the proceeds never enter your possession.
These are always worth discussing with your CPA.
These are always worth discussing with your CPA.
Posted on 6/10/25 at 8:59 am to horsesandbulls
Yeah I will talk to someone if it gets further down the road.
The two properties aren't really similar. If I were to do a 1031, the only real estate I'd be interested in is a hunting ranch. I could say I "plan" to log it or lease hunting trips to generate revenue, but that's not my real intention.
I want some more hunting land and I want to not get butt fricked on capital gains, so I was hoping to kill two birds with one stone.
The two properties aren't really similar. If I were to do a 1031, the only real estate I'd be interested in is a hunting ranch. I could say I "plan" to log it or lease hunting trips to generate revenue, but that's not my real intention.
I want some more hunting land and I want to not get butt fricked on capital gains, so I was hoping to kill two birds with one stone.
This post was edited on 6/10/25 at 9:01 am
Posted on 6/10/25 at 9:08 am to El Segundo Guy
quote:
The two properties aren't really similar
Are they at least similar or potentially similar uses? I’d get in touch with an intermediary or a CPA and run the questions by them. I’ve seen dissimilar properties used in a 1031, just needs to be reasonable. I think focus tends to be more on value of each.
Posted on 6/10/25 at 9:14 am to jordan21210
Thanks. I think the values line up pretty well on paper, just different. Ones much more per acre than the hunting land.
Posted on 6/10/25 at 4:20 pm to El Segundo Guy
quote:Yep
From what I gather, 45 days after selling, you have to identify up to 3 properties and close within 180 days. Is that correct?
quote:Yes, I sold a 9th ward duplex and did a 1031 exchange on a timberland. I have not cut yet because the land isn't ready for a 1st thinning yet.
Would a hunting parcel count as a 1031 if I "want the property to appreciate for potential future gains" be enough to suffice?
quote:
Also, what if the new land was a higher price than the sold land?
Mine was that way. I subdivided it during the purchase process such that one parcel was bought through the 1031 exchange and the smaller parcel I purchased cash. That made the smaller parcel eligible for resale without affecting the 1031 deal.
It must be done by a qualified intermediary, but they are not hard to find.
Posted on 6/10/25 at 11:16 pm to dat yat
The type of the Relinquished Property or Replacement Property doesn’t matter. The properties just have to be held for investment purposes. For example, You can sell a residential investment property and buy a commercial investment property.
For the 1031 identification notice, the most common rule is you can identify up to 3 properties without regard to the total value of the properties. You can buy 1, 2 or all 3 of the properties that you identify. There are a couple different rules if you want to identify more than that.
For the 1031 identification notice, the most common rule is you can identify up to 3 properties without regard to the total value of the properties. You can buy 1, 2 or all 3 of the properties that you identify. There are a couple different rules if you want to identify more than that.
Posted on 6/11/25 at 7:13 pm to El Segundo Guy
You need to make contact with a reputable company/attorney that specializes in 1031 Exchange as soon as possible. It could take 2 months or longer for them to get the paperwork squared away.
Posted on 6/12/25 at 6:38 am to El Segundo Guy
I have done a number of them over here...condo for condo and land for condo...don't need a CPA but rather a real estate attorney.
Posted on 6/12/25 at 6:55 am to dat yat
quote:
must be done by a qualified intermediary
This is the most important point - you as the seller cannot touch the proceeds or you’ve botched the 1031.
Get in touch with a closing attorney and use a national 1031 exchange (like First American) by far the easiest and cost efficient way to do it.
Like poster above said, type of property doesn’t matter as long as it’s real estate (can’t be stock or an entity interest) and being held for investment purpose.
Posted on 6/12/25 at 3:36 pm to Rabt
It takes the national companies 2-3 days to get the documents ready. I’d setup the exchange at least a week from closing. I recommend IPX 1031.
Posted on 6/12/25 at 4:28 pm to LazloHollyfeld
quote:
Get in touch with a closing attorney and use a national 1031 exchange (like First American) by far the easiest and cost efficient way to do it.
That is who I used.
The replacement property must also be entitled the exact same way as the relinquished property and my original property was in my name. I had a couple folks interested in being partners in the timberland deal; and I considered using an LLC, but the 1031 rules put the kibosh on that.
Posted on 6/12/25 at 11:49 pm to dat yat
The taxpayer has to be the same, not the same entity that sold the relinquished property. You could have done a 1031 and then bought the replacement property with your friends as tenants in common where you own an undivided x% of the replacement property as tenants in common.
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