1031 Exchanges Attorney in Charleston, South Carolina
Your 1031 Exchange Attorney in Charleston South Carolina
Section 1031 of the Internal Revenue Code permits investors to defer the payment of tax on the gain from the sale of property held for productive use in business, trade or investment, provided that the property is exchanged for a “like kind” asset or assets. The section creates a “safe harbor” that permits the taxpayer to have assurance that the transaction will permit the deferral of the capital gain tax payment.
A properly executed 1031 Exchange allows investors to defer gains and accumulate significant wealth by “trading up” investment properties during their lifetime without triggering capital gains tax liability at the time of the sale of each asset. The rules and regulations are strict, however, and the IRS will not permit variations to the “safe harbor” created by the exchange rules.
While an entirely separate entity from Bradshaw & Company, LLC, B&C 1031 Qualified Intermediary, LLC is an attorney-operated exchange facilitator based out of Charleston, South Carolina and dedicated to providing our clients with superior service for their 1031 needs. You can certainly consider larger national companies with tens of thousands of other clients, but you are unlikely to find a local exchange facilitator with more knowledge and overall real estate experience than our company.
For those interested in better understanding the basics of the 1031 exchange, please download the following materials: [link to PDF of 1031 materials]
While each taxpayer is strongly encouraged to consult with their CPA to perform any calculations needed prior to moving forward with a 1031 exchange, clients can either plan to structure only a partial exchange whereby they receive some of the net proceeds from their sale with the balance to be used in the 1031 exchange to purchase replacement property or structure their exchange with the goal of full tax deferral. If some funds are desired from the sale, however, it’s best to receive these funds at closing as the Intermediary is restricted on when 1031 exchange funds can be returned to a taxpayer.
The two (2) key deadlines in a 1031 exchange are very specific and without exception or extension. From closing on the first property of the exchange (most often, the sale of the relinquished property), a taxpayer must:
Properly identify potential replacement properties within 45 calendar days (the “Identification Period”)
Close on the replacement properties within 180 calendar days of the relinquished property sale – OR – the due date (including extensions) for the taxpayer’s tax return for the taxable year in which the relinquished property was transferred, whichever is earlier (the “Exchange Period”)
Without taking into consideration a taxpayer’s potential tax filing date restriction and based upon the closing date submitted, the 45-day Identification Period and 180-day Exchange Period deadlines are shown below: