45 Days to Reinvest?

Stax Capital has access to a large inventory of 1031 Exchange Opportunities to help defer taxes.

Stax provides access across all stages of the real estate life cycle.
We look to offer passive income and growth strategies,
portfolio diversification and tax advantages for accredited investors.
Our network, due diligence, and commitment is what sets us apart.

That’s how we put diversification first

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What is the 1031 Exchange?

The 1031 tax deferred exchange is a method of swapping one property held investment or business purposes, allowing capital gains to be deferred and the investment to grow tax deferred.  To different capital gains, the Internal Revenue Service (IRS) must consider 1031 Exchange   to be like-kind. The 1031 Exchange gets its name from section 1031 of the Internal Revenue Code (IRC), which deals with exchanges of property held for investment or productive use. The 1031 Exchange is also commonly known as a like-kind exchange or tax deferred exchange, and “1031” can be used as a verb in the industry.  There is no limit to how frequently 1031 Exchanges can be performed when used correctly.

The Rules

As previously stated, in order for the transaction to qualify as a 1031 Exchange, both properties must be like-kind. The IRS also limits using a 1031 Exchange on vacation properties, and there are factors, like timing, facilitation, and value, that must be met.

Timing – After selling a property and having handed proceeds to a tax deferred exchange facilitator, the reinvestment property must be identified within 45 days from the home’s transfer or sale of the existing property. The replacement property must be received from the transfer or sale date within 180 days of the property being relinquished, or before the due date of an investor’s tax return for the taxable year.

Facilitation – Typically, a qualified third party is usually required to facilitate in a 1031 Exchange property.  Responsibilities of the facilitator include transferring money to the person who has sold the reinvestment property and keeping the profits in an escrow account that the facilitator managed before this occurrence.

Value – A replacement property must be equal to or greater in value than the relinquished property for a transaction to qualify to a 1031 Exchange. In a situation where a replacement property has a lower value than the disposed of the property, taxable gains may result.

Who can qualify for a 1031 Exchange?

Anyone who owns the property for business or investment purposes in the United States is eligible for the 1031 Exchange Properties.

Risks

Investors may be faced with steep unplanned taxes when utilizing a tax deferred exchange, especially when considering the various stipulations, the IRS has imposed. Meeting the time guidelines imposed by the IRS can be challenging when navigating the complexities of 1031 tax-deferred exchanges is crucial to the preservation of wealth.

It helps to have a trustworthy and experience team when you are looking at the risks involved. Over the last two decades, we have handled thousands of 1031 tax differed exchanges. Start the conversation today!