Sometimes a Little Knowledge is Dangerous

Any real estate investor has seen the headline touting a 1031 exchange. By doing a 1031 exchange you are selling one investment property and purchasing another one with your gains. By doing so, you defer paying any gains-pretty neat right.

Now comes a question that the headlines don’t stress. To complete a 1031 exchange and defer taxes the time limit is:
1. There is no time limit.
2. You must purchase new property within one year.
3. You must purchase new property before next tax season.
4. 45 days

Well, my friend sold his rental property in southern California and was fortunate enough to have $1,000,000 in gains-no sweat he was going to do a 1031 exchange and defer the taxes. Only problem is he wasn’t aware of the time limit of 45 days!Fortunately, he happened to mention his 1031 exchange to his accountant who told him of the time limit. On the very last day of the limit he was able to secure the new property. Sometimes, you have to read the whole article, not just the headlines 🙂

Steve Mertz
I Read the Whole Article!

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One Response to “Sometimes a Little Knowledge is Dangerous”

  1. Steve Mertz says:

    Actually…you are right as the link it my article points out. Thanks for the additional info-this process can get involved!!

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