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1031 Exchange

Defer taxes with a 1031 ExchangeA 1031 Exchange allows you defer your taxes due on the sale of your property. 

A 1031 Exchange is a legal option that will help you grow your assets.  If your property qualifies and you use those proceeds to purchase another acceptable property it is possible.  Of course, there are specific guidelines that must be followed but a 1031 Exchange is a fantastic option that you should consider taking advantage of if it works for you.

Does your property qualify for a 1031 Exchange?

The guidelines for a 1031 Exchange are ever changing and it is always best to discuss your specific circumstances with a Qualified Intermediary Company but here are some general rules for residential properties.

  1. Typically, you must have owned the property for at least 24 months immediately prior to the exchange. There are some exceptions to this rule. If you have owned the property for less than 2 years check with your advisor to see if one of the exceptions might fit your circumstances.  In addition, you must own the new property for 24 months after the exchange. If you are planning to do a quick flip, a 1031 Exchange is probably not the best option.
  2. For two of the five years prior to the sale, the owner must rent the property to another person or persons at a fair rental price for 14 or more days.  Also, the owner’s personal use cannot exceede 14 days or 10% of the number of days the property is rented.  Personal use is also use by family members, a trade, or charging below market rents.  This requirement rules out many second homes that have a lot of owner use.

Additional 1031 Exchange requirements

You must follow additional rules for the sale and subsequent purchase after determining if your current property qualifies.

  1. A Qualified Intermediary must hold the proceeds from the sale.  If that money goes into your bank account between transactions it becomes your gain and you must pay capital gains.  With that in mind, you must have a company hired before completing the sale of your property.  You cannot make a decision to do an Exchange after the fact.  If you’re not sure if your property qualifies, talk to a qualified company and find out now.
  2. There are time limits you must meet on your purchase.  You have 180 days to complete your purchase.  That includes 45 days to identify in writing which possible properties you might purchase. There are qualifications for the properties you identify and the date you file your taxes may affect your time limits so be sure to discuss these with your exchange company.
  3. The purchase price of your replacement property must be equal to or more than the relinquished property’s sale price.

As you can see, there are plenty of guidelines you must follow to create a safe harbor for a property exchange.  Even so, it is a relatively painless way to keep from sending Uncle Sam a good part of your gain.  You can also do a delayed exchange, a partial exchange or a reverse exchange so if you aren’t sure if you may qualify, it’s worth a call to find out for sure.

Qualified Intermediaries

To find out if your property qualifies talk to your accountant or a Qualified Intermediary (QI).  Below are a few companies we recommend. We are not affiliated with any of these companies and are not responsible for their actions. They are companies that our clients have had good results with in the past.  You should do your own due diligence before choosing a company to work with.

Asset Preservation Incorporated    www.apiexchange.com    800-262-1031

The 1031 Exchange Experts    www.expert1031.com    866-694-0204

1031 Exchange Professionals    www.1031cpas.com   888-367-1031

Land Title Exchange Corporation  www.landtitleexchangecorporation.com 303-850-4197

 

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About Us

Mountain Living Real Estate, a.k.a. The Mountain Living Team, is a family owned, second generation, real estate company that has been helping buyers and sellers in Summit County since the early 90’s.  Mountain Living Real Estate is committed to going above and beyond to ensure their clients have the most amazing real estate experience possible.  Jason & Meredith take a personal approach to educate their clients, empowering them to make high quality decisions no matter the situation.  They take exceptional care throughout the sales process and beyond; striving to make each client’s path in Summit County one filled with fun, excitement & great memories.

Work with Mountain Living Real Estate and you’ll understand why so many people say, “We Love Mountain Living!”

Testimonials

Passage Point at Copper Mountain

Jason was very patient with us and was dedicated to helping us find the right property for our family’s needs.  During the closing process he was very knowledgeable , and a great communicator so that we knew what would happen at every step.  Wasn’t always available when we had time to see properties.

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Colleen from Colorado January 17, 2017

Condo in Keystone

Meredith was very friendly, professional and knowledgeable.  She always returned phone calls promptly and provided information beyond expectation.

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Steve & Mary from Colorado June 9, 2017

River Mountain Lodge in Breckenridge

Everything they did was GREAT! We will definitely use them again when the time comes.

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Lou & Lori from Pennsylvania June 9, 2017

Lake Haus Condo

The Mountain Living Team was extremely prompt and efficient throughout the sales process. They were very friendly and personable in our interactions with our renter. As a non-resident second home owner, we needed help selling our Summit County condo. The Mountain Living Team were excellent.  They know the Summit County market very well and priced

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Rex & Sherri from Colorado August 2, 2017

Single Family Home in Dillon

The negotiating skills you brought to the table to ensure we got the best price for our home were exceptional! Thank you Jason and Meredith you both have made our transition so much easier and having you both working on our behalf was very comforting.

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Shane from California September 16, 2017

Royal Glen in Frisco

Never had any contact with Jason but Meredith went above and beyond helping us in selling our townhome. It was a bumpy start and somewhat bumpy finish due to the buyer but she handled it like a Pro! We will miss Frisco and wish you all the best. Happy Holiday and Thank you

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Diane & John from Florida November 15, 2017

Mountain Side in Frisco

Once again, we greatly appreciated all you do for your clients! We definitely appreciate the special care and attentiveness you provide in both the process of buying and selling a property.

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Lillian & Kai-Peter from Washington December 22, 2017

Breckenridge home

Meredith was almost always available on short notice.

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Bob from Missouri December 27, 2017

Home in Keystone

You were amazing. We couldn’t have asked for a better experience. (Most impressed with) The speed with which questions were answered and the quality time taken to do so. The fact that the relationship does not end once the purchase has been made.

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Alexi from Colorado January 26, 2018

Breckenridge Home

Meredith worked hard to understand what we were looking for and was patient with our search. Her knowledge of Summit County area was super helpful in guiding us to areas we may find a good fit.  I always felt that Meredith had the time for us during our search, selling of a lot and purchase of

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Cristina from Colorado January 27, 2018

Contact Us


Jason and Meredith Adams

Jason & Meredith Adams
Mountain Living Real Estate

101 Main St, #109, PO Box 4115 Frisco, CO 80443

(888) 666-0844
team@mountain-living.com
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