1031 Exchange
ABOUT US
Qualified Intermediary (QI)
Nearly 30 years ago, the IRS updated IRC section 1031 to require the use of a qualified intermediary to hold funds when transacting the sale and purchase of real estate through a 1031 exchange.
At Directrust 1031 exchange services, we help our clients navigate the intricacies of IRC Section 1031 and provide them with a qualified intermediary to assist them.
Call us today. We can answer all your exchange questions.
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Contact info
Phone Number
877-975-1031
Email Address
exchange@directrust1031.co
Office Address
3833 E Main St, Unit 2131 Saint Charles, IL 60174
Quick Links
Visit our list of links that will help educate you on your 1031 exchange journey.
The Main Advantage of a 1031 Exchange
The main advantage of an exchange is an investor/taxpayer has the chance to use their entire equity to acquire a replacement property.
Exchangers who have held onto properties for decades because of the tax consequences have the choice to move their equity into more beneficial properties.
An exchange transaction can be tax-free with taxes deferred into the future. If an taxpayer wants to invest in like-kind property, an exchange is usually the preferable alternative to a sale and a purchase.
Other advantages can include…
- Leverage and appreciation using “someone else’s money”
- Increase your cash flow by exchanging properties
- Diversify or consolidate your investment properties
- Exchange non-depreciable real estate for depreciable real estate
- Relocate geographically to your advantage
The Napkin Test
We’ve heard there is a bit of folk lore behind how this short and sweet rule came into being but regardless, it is accurate.
For a 1031 exchange to be fully tax deferred, the value, equity and mortgage in the Replacement Property must be equal to or greater than that of the Relinquished Property.
If you are trading down in value or equity, you are potentially taxable to the extent of the trade-down.