1031 EXCHANGE TAX ALERTS
1031 EXCHANGES INVOLVING YOUR PRINCIPAL RESIDENCE
The act:
The American Jobs Creation Act signed by President Bush on October 22, 2004
contains a provision that imposes a 5-year ownership requirement for home
sellers excluding gain under the principal residence exclusion rules of IRC §121
on a property that was originally acquired through an exchange under IRC §1031.
The procedure:
Your personal residence exemption ($250,000 single, $500,000 joint) is applied
first, then any remaining gain can qualify for a 1031 exchange.
What this means to you:
If you satisfy the requirements, you can now combine your primary residence
exemption and complete a 1031 exchange for optimal tax savings and benefits
when you sell.
What now?
If you are planning on selling, call your 1031 Exchange Advantage experts toll-free
at 1-866-944-1031 to determine how to take advantage of the new law and gain
maximum tax savings. 1031 Exchange Advantage, Inc. makes 1031 exchanging
simple and risk-free with our TAX FREE OR NO FEE policy. We'll guide you
step-by-step though a successful tax-free exchange.
DON'T FILE YOUR TAX RETURNS JUST YET
The requirement:
One of the deadlines imposed by the IRS for a valid exchange is the 180-calendar-day
closing period. You must close on your replacement property on or before
the earliest of (1) 180 calendar days after the closing of your first relinquished
property or (2) the due date for your tax return for the year in which the
relinquished property closes.
What this means to you:
Don't file your 2004 tax return yet if you opened an exchange in 2004 and are
still in the process of completing your exchange. Allow yourself the maximum
amount of time to complete your exchange by filing for an extension for your
tax return deadline. Your 180-day exchange period will terminate the moment
you file your tax return.
What now?
File for your extension to continue with your 1031 exchange.
1031 DEADLINE EXTENDED FOR HURRICANE VICTIMS
The notice:
The IRS issued Notice 2005-3, granting additional 1031 exchange deadline extensions
to the victims of hurricanes Charley, Frances, Ivan, and Jeanne, and tropical
storm Bonnie. Notice 2005-3 allows for a 120-day postponement if the taxpayer,
for specified reasons, has difficulty meeting either the 45-Day Identification
Period, the 180-Day Exchange Period and gives a 120-day extension to the
180-Day Exchange Period if an exchangor's identified replacement property
(or, in a reverse exchange, the identified relinquished property) is substantially
damaged.
What this means to you:
If you were a victim of the hurricanes, you may be eligible for a 120-day extension
regarding your 1031 exchange deadlines.
What now?
The rules of Notice 2005-3 get rather technical, so to make sure you qualify
for the deadline extensions give your 1031 Exchange Advantage experts a call
toll-free at 1-866-944-1031. Your property and circumstances
are unique, so call us today to make sure you receive the greatest tax savings
and benefits.
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