Frequently Asked Questions
You have questions, we have answers.
Revocable Trusts
Trusts are often involved in Internal Revenue Code “IRC” Section 1031 exchanges. How the exchange is made depends on who the taxpayer is, typically the trustee holds legal title to the property and can make the exchange, this depends how the trust is structured with the “grantor” and beneficiaries. GPC1031 Exchange can help you investigate to determine your best options.
Real Estate Investment Trust (REIT)
REIT’s are corporations that own and manage a portfolio of real estate properties and mortgages. Individual investors can purchase shares in a publicly traded REIT. Like partnerships, REIT’s cannot do an exchange at the individual level, only at the corporate for a like-kind real property.
Using a Second Home for a 1031 Exchange
When utilizing a non-primary property as a vacation/second home, the qualifications for a tax deferrable asset of a section 1031 exchange, require that the property is utilized as a rental and not for personal use only. An investor can find deductible mortgage interest and real estate taxes on Form 1040 Schedule A of the federal tax return.
Vacation Properties
A vacation property may qualify for a 1031 exchange; however, definitive rules must be followed. The property must be rented for a minimum of two weeks to a non-relative, for a minimum of two years prior to and after the exchange.