First Integrity 1031 Exchanges LLC is your industry partner providing Qualified Intermediary
services in Colorado and nationally across all 50 states.
What is a 1031 exchange?
A 1031 exchange allows you to defer various forms of taxes including capital gains, depreciation recapture, and state tax in most states. To successfully complete a 1031 exchange, there are certain requirements necessary and one of those includes the engagement of services from a professional Qualified Intermediary (QI). First Integrity 1031 Exchanges LLC is your industry partner providing QI services in Colorado and nationally and is supported by First Integrity Title Company, a full service title company with over 20 years of service and over 200,000 successful transactions closed.
Does it make sense for me to do a 1031 exchange?
1. Do you, or your entity, pay US taxes? If yes, then you are eligible for a 1031 exchange.
2. Is the SAME taxpayer that is selling the property also buying the replacement property? If yes, then you are eligible for a 1031 exchange.
3. Is the property you are selling “real property” that has been held for business or investment use (The property must be shown on the Schedule E of your tax returns)? If yes, then the property should qualify for a 1031 exchange.
4. Is the property to be sold and purchased must be like-kind real property. Making sure that either property is or will not be a primary residence or vacation home. If yes, then you are eligible for a 1031 exchange.
5. Are you planning on reinvesting the full sale proceeds from the sale of your property into another property that will be held for business or investment use? If yes, then you qualify for a 1031 exchange. However, if the answer is no, perhaps you plan to reinvest your proceeds into a second home for yourself, then the transaction would not qualify for a 1031 exchange.
6. Do you plan on reinvesting all the proceeds from the sale into a new business or an investment use property? If yes, or if you plan to reinvest the majority, then a 1031 exchange would be a good fit. If you need or want to keep most of the proceeds rather than reinvest, then a 1031 exchange wouldn’t provide a ton of value.
7. Have you already sold your property and received the proceeds? If yes, then you no longer qualify for a 1031 exchange because you already received the gain, which is now taxable.
8. From the close of the sale on your property, will you be able to identify a potential replacement property within 45 days? If you think you can achieve this, then a 1031 exchange could be a great option for you.
9. Is it feasible to sell your property and acquire your new property within a 180-day period? If yes, then a 1031 exchange should be considered.
If you think you can achieve this, then a 1031 exchange could be an excellent option for you!
Have questions or want to start the exchange process?
Contact our lead exchange coordinator to start an exchange today.
