1031 Exchange

When you sell real estate property you generally have to pay Capital Gains taxes. You can defer these taxes with us, through a 1031 exchange rule in Twin Falls. In 1990, the IRS outlined a detailed procedure for turning a sale and purchase of property into an exchange, allowing sellers of certain types of property to exchange for other similar properties and defer Capital Gains tax. This process gets its name from the U.S. Internal Revenue Code: Section 1031 (a)(1) which states:

“No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment, if such real property is exchanged solely for real property of like-kind which is to be held either for productive use in a trade or business or for investment.”

A 1031 exchange is when you sell your property and buy another like-kind property within a certain timeframe and follow a specific set of guidelines. This is a tax-deferred investment strategy meaning that you will keep putting off what you owe in taxes until a later date. The goal is to defer these for life.

Once you decide that a 1031 exchange in Twin Falls is the way for you, the next step is finding a good Qualified Intermediary (or Q.I.) to act as your middleman and trusted-holder of your funds throughout the entire exchange process. Do NOT shop around for the cheapest Q.I.. Instead, do your research and find one that is trusted and backed with years of experience. CAPELLA CORP. is a qualified intermediary prepared to assist you in completing a smooth and effortless Exchange.

From the date you sell your property, you have a 45 day window to identify new property (or properties) that you want to invest in. You have 180 days total to completely close on your new property in order to successfully defer your taxes. These dates are non-negotiable; meaning that if you fail to follow these guidelines then those taxes will be due when you file your tax return. Let Title Fact help you with the 1031 exchange rule in the Twin Falls area.

Contact keasterday@titlefact.com for more information on the 1031 exchange.

163 Fourth Avenue North
P. O. Box 486
Twin Falls, Idaho

Phone: 208-733-3821
Fax: 208-733-3878

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