At Allegis Law, we help real estate investors minimize taxes and protect wealth by providing strategic legal guidance for 1031 exchanges. With over 15 years of experience, 1031 exchange attorney Rustin Diehl provides the clarity and guidance you need to confidently defer taxes and make the most of your real estate investments.
Navigating a 1031 exchange requires careful planning and precise execution. Our experienced tax attorney will guide you through every step of the exchange process to keep you in compliance with complex IRS regulations while protecting your investment.
Comprehensive analysis of your current portfolio and investment goals to structure the optimal exchange strategy, including evaluation of potential replacement properties and timing considerations.
Assistance in selecting and coordinating with a qualified intermediary to ensure proper handling of exchange funds and documentation.
Thorough review and preparation of all required exchange documents, including exchange agreements, assignments, and notices.
Monitoring and ensuring adherence to critical 45-day identification and 180-day closing deadlines.
Detailed review of relinquished and replacement properties to confirm like-kind status and identify potential issues with property holding periods.
Computation of adjusted basis and potential boot implications to minimize tax exposure.
While all exchanges must follow IRS guidelines for like-kind property and investment purpose requirements, each type offers unique advantages to meet different investor needs.
The most common and straightforward option. Sell your property first, then purchase the replacement property within the required timeframes. You'll have 45 days to identify potential properties and 180 days total to complete the purchase.
The simplest in concept but rare in practice. Both properties close on the same day in a direct swap. While this offers the lowest risk when executed properly, coordinating simultaneous closings can be challenging in real-world transactions.
Need to secure a replacement property before selling your current one? A reverse exchange allows you to acquire your new property first, then sell your existing property within 180 days. While this offers maximum flexibility, it requires more upfront capital and typically involves higher costs.
Want to use your exchange funds for property improvements? Also known as an improvement exchange, this structure lets you use exchange equity to build or renovate your replacement property before taking ownership. All improvements must be completed within the 180-day exchange period.
Perfect for portfolio restructuring, a multi-property exchange transaction allows you to exchange multiple properties in a single transaction. You can either identify up to three potential replacement properties of any value, or unlimited properties up to 200% of your relinquished property's value.
A “Drop & Swap” exchange is an option when some partners in a partnership want to cash out and others want to reinvest their sale proceeds into new property via a 1031 exchange. This will allow each partner to get what they want but comes with complexities due to partnership interests being ineligible for 1031 exchange treatment under IRC § 1031(a)(2)(D).
In a Drop & Swap exchange, the partnership dissolves before the property sale, and the partnership interests are distributed to each partner (the “drop”). This allows individual partners to either reinvest their share of the proceeds into new property without paying capital gains tax on the gain (the “swap”) or cash out and pay tax on the gain.
In a Swap & Drop exchange, the property is acquired by the partnership as part of a 1031 exchange. But if the partnership then distributes the interests in the property to individual partners, the IRS may argue that the exchange did not serve a legitimate investment purpose but instead was done to avoid taxes.
In Court Holding Co., the US Tax Court held that if a series of transactions is merely to change tax obligations, the IRS can treat the transaction as it truly is, ignoring the superficial steps taken solely for tax benefits. Therefore we do not recommend or assist with Swap & Drop exchanges.
A 1031 exchange allows real estate investors to defer paying capital gains taxes when they exchange investment or business-use property for another property for business or investment use.
Coordinate your business succession plan with your personal estate plan to create a seamless transfer of both business and personal assets. This integrated approach helps minimize taxes, avoid probate, and protect your wealth for future generations.
Coordinate your business succession plan with your personal estate plan to create a seamless transfer of both business and personal assets. This integrated approach helps minimize taxes, avoid probate, and protect your wealth for future generations.
Coordinate your business succession plan with your personal estate plan to create a seamless transfer of both business and personal assets. This integrated approach helps minimize taxes, avoid probate, and protect your wealth for future generations.
Coordinate your business succession plan with your personal estate plan to create a seamless transfer of both business and personal assets. This integrated approach helps minimize taxes, avoid probate, and protect your wealth for future generations.
Coordinate your business succession plan with your personal estate plan to create a seamless transfer of both business and personal assets. This integrated approach helps minimize taxes, avoid probate, and protect your wealth for future generations.
Lean on the strategic legal guidance of 1031 exchange attorney Rustin Diehl to:
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