FAQs Archive - Page 3 of 4 - Horvath & Tremblay

Q: Does an investor have to spend all of the 1031 Exchange proceeds?

No, you do not have to reinvest 100% of your net sales proceeds, however, the amount that you do not reinvest will be subject to depreciation recapture and capital gain income tax. Only the amount that you reinvest will be tax-deferred. This is called a partial 1031 exchange and will result in, what is referred to as, mortgage boot and/or cash boot. Mortgage boot and cash boot are the taxable proceeds not utilized in the exchange. You will need to reinvest 100% of your net sales proceeds if you want to defer 100% of your tax liabilities.

Q: What time deadlines apply to a 1031 Exchange transaction?

The 1031 Exchange deadlines consist of the 45 calendar day identification period and a 180 calendar day total exchange period, from the sale date of the relinquished property

Who qualifies for a Section 1031 Exchange?

Individuals, C-Corporations, S-Corporations, General Partnerships, Limited Partnerships, Limited Liability Companies, [...]

Who qualifies for a Section 1031 Exchange?Horvath & Tremblay2023-06-07T12:49:14-04:00

Can an investor buy shares in a Real Estate Investment Trust (REIT) for their like-kind replacement property?

No. Your relinquished properties and your like-kind replacement properties must [...]

Can an investor buy shares in a Real Estate Investment Trust (REIT) for their like-kind replacement property?Horvath & Tremblay2018-02-15T13:08:04-05:00

Can corporations, general and limited partnerships, and limited liabilities companies complete 1031 Tax-Deferred Exchanges?

Yes, taxpaying entities of any type are typically allowed to [...]

Can corporations, general and limited partnerships, and limited liabilities companies complete 1031 Tax-Deferred Exchanges?Horvath & Tremblay2018-02-15T13:07:35-05:00

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