Frequently Asked Questions
What is a section 1031 exchange or a 1033 exchange?
Generally, in a real estate transaction, the property owner is taxed on any gain realized from the sale. Under a Section 1031 or 1033 exchange, however, taxpayers can defer capital gains taxes on the sale of property as long as they reinvest the proceeds into like-kind property, such as a NNN 1031 property.
What are the potential investor benefits of a 1031 or 1033 exchange?
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Tax deferral using a 1031 or 1033 Exchange
Tax deferral using a 1031 or 1033 Exchange • Increased cash flow
•Unlocking trapped equity to earn cash flow
Unlocking trapped equity to earn cash flow •Increased depreciation deductions on replacement property
Increased depreciation deductions on replacement property •Increased tax efficiency
Increased tax efficiencyWhat qualifies as "like-kind" property?
Generally, any property that is held for business or investment will qualify as "like-kind". Examples include:
Delaware Statutory Trusts (DST)
Apartment buildings
Net Leased properties i.e. Walgreens, CVS, Starbucks, McDonalds, etc
Duplexes and triplexes
Single-family rentals
Vacant land
Farm land
Office buildings
(www.irs.gov)
What are the basic requirements to complete a 1031 exchange?
It is best to get a professional to help with the significant details and requirements for completing a 1031 exchange. The basic steps are as follows:
•Write a cooperation clause into the purchase agreement on the relinquished property.
Write a cooperation clause into the purchase agreement on the relinquished property.•Locate a qualified intermediary to hold your exchange proceeds.
Locate a qualified intermediary to hold your exchange proceeds. •Identify your replacement properties with your qualified intermediary within 45 days of the sale of your relinquished property (using the 3 property rule, the 200% rule, or the 95% rule).
Identify your replacement properties with your qualified intermediary within 45 days of the sale of your relinquished property (using the 3 property rule, the 200% rule, or the 95% rule). •Close on your replacement properties within 180 calendar days of the sale of your relinquished property.
Close on your replacement properties within 180 calendar days of the sale of your relinquished property. •Purchase a property of equal or greater value.
Purchase a property of equal or greater value. •Reinvest 100% of net sales proceeds into the replacement properties.
Reinvest 100% of net sales proceeds into the replacement properties. •Acquire an equal or greater amount of debt on the replacement properties.
Acquire an equal or greater amount of debt on the replacement properties.What are the basic requirements to complete a 1033 exchange?
It is best to get a professional to help with the significant details and requirements for completing a 1033 exchange. The basic steps are as follows:
•Purchase a property of equal or greater value.
Purchase a property of equal or greater value. •Reinvest 100% of net sales proceeds into the replacement properties.
Reinvest 100% of net sales proceeds into the replacement properties. •Acquire an equal or greater amount of debt on the replacement properties if applicable.
Acquire an equal or greater amount of debt on the replacement properties if applicable.US Wealth Management
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This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please be aware that this material cannot and does not replace the Memorandum and is qualified in its entirety by the Memorandum. This material is not intended as tax or legal advice so please do speak with your attorney and CPA prior to considering any investment. This website contains information that has been obtained from sources believed to be reliable. However, US Wealth Management, Colorado Financial Services Corporation, and their representatives do not guarantee the accuracy and validity of the information herein. Investors should perform their own investigations before considering any investment. There are material risks associated with investing in real estate, Delaware Statutory Trust (DST), and 1031 Exchange properties. These include, but are not limited to, tenant vacancies; declining market values; potential loss of entire investment principal; that past performance is not a guarantee of future results; that potential cash flow, potential returns, and potential appreciation are not guaranteed in any way; adverse tax consequences; and that real estate is typically an illiquid investment. Please read carefully the Memorandum and/or investment prospectus in its entirety before making an investment decision. Please pay careful attention to the “Risk” section of the PPM/Prospectus. This material is not intended as tax or legal advice so please do speak with your attorney and CPA prior to considering an investment. IRC Section 1031, IRC Section 1033, and IRC Section 721 are complex tax codes, therefore, you should consult your tax and legal professional for details regarding your situation. Securities offered through registered representatives of Colorado Financial Service Corporation, Member FINRA / SIPC. US Wealth Management and Colorado Financial Service Corporation are separate entities. OSJ Address: 188 Inverness Drive West, Ste 100, Centennial, Colorado 80112. Check the background of this Registered Representative on FINRA's BrokerCheck.
Request Exchange Properties:
Name:
Email:
Phone:
Fill out our simple form for property information
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