Discover the most significant challenge in the world of 1031 Exchanges – Vesting! There are five different types of property vesting, and each one could have a unique impact on your real estate exchange. Watch Tina Colson-Jones as she breaks down vesting & the 1031 Exchange.
One of the cornerstones of the 1031 exchange is continuity of vesting. Vesting is how you hold title on a property. When executing a 1031 exchange, the taxpayer selling the relinquished property must be the taxpayer purchasing the replacement property.
As an example, if there was a multi-member LLC and the members all want to sell the investment property together and purchase another investment property together, the qualified intermediary can do the exchange for the entity itself, which is the taxpayer.
But what happens if one member wants to take their proceeds through a 1031 exchange and the other member chooses to take the cash and pay the tax? In this second scenario, a drop and swap will need to occur. The best thing to do is pre-plan: dissolve the LLC, deed the property to the individual members as tenants in common, and then hold the property for a period of time.
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Whether working through a 1031 Exchange with Equity Advantage, acquiring real estate with an IRA through IRA Advantage or listing investment property through our Post 1031 property listing site, we are here to help Investors get where they want to be. Call them today! 503-635-1031.
