The Wall Street Fraud Watchdog at http://www.Wallstreetfraudwatchdog.com is urging investors to increase their due diligence for real estate investments in limited partnerships, general partnerships, tenant-in-common and similar opportunities, claiming that many such investments are scams. The organization stated today that “without question there are 1000′s, probably 10,000′s of US investors, who have a good portion, or all of their life savings stuck in a real estate limited partnership, business opportunity, or an investment opportunity, that will never produce a dime. In many cases the investor could lose all of their money…” Here is a link to their press release: http://www.wallstreetfraudwatchdog.com/pressrelease.htm

When considering replacement property opportunities, be careful to conduct thorough due diligence on the investment opportunity and most notably on the principles of the organization.

This article and information was provided by a friend of mine, Steve Katkov. Steve Katkov is Senior Vice President and General Counsel for Commercial Partners Exchange Company (CPEC), a national qualified intermediary facilitating tax-deferred exchanges of both real and personal property pursuant to Section 1031 of the Internal Revenue Code. He has been involved in thousands of 1031 exchanges of real and personal property, including complex reverse and improvement exchanges. His client list includes Fortune 100® companies and some of the nation’s largest privately held corporations. Prior to joining CPEC, Steve served for more than six years as a Vice President/Regional Manager for First American Exchange Co. (a subsidiary of First American Title Ins. Co.).

Steve Katkov, SVP (612) 419-6118
Commercial Partners Exchange Co.
1300 U.S. Bank Plaza
220 South Sixth Street
Minneapolis, MN 55402

Real property should go into rules and requirements needed for 1031 exchange IRS rules. A lot of people may have any question for in the sale of their real property and about 1031 exchange should consult a tax professional. For people who may not have heard about this 1031exchange, it was created during the year of 1990. The main purpose of having this 1031 exchange is to help real estate investors who are in a real estate business. They can benefit from their investment by re-investing their properties for exchange to their old properties.

Although this process may seem like ordinary tax federal procedures, it is essential to your business for you to gain knowledge about exchange rules. Just like other business ventures, there are a lot of requirements for you to qualify in this 1031 exchange code.

A minimum of at least two properties should be involved within the transaction. You cannot use your own home to qualify for 1031 exchange code. You have to hire a personal real state lawyer to help you in fixing legal processes involving 1031 exchange. You may also choose to hire a qualified intermediary to ease the problem of getting 1031 exchange requirements.

You have to go after the 45 day rule. You only have 45 days from the actual date you “sell” your property to see the property that you want to “buy.” Keep in mind that rules are presented because you are responsible in doing an exchange and you are required to follow exchange rules. It is better if do not trade your property, pouch the money, and look for a new property. Take the 45 day rule to look for the right property for your exchange.

The 1031 exchange take the 180 day rule. You only have 180 days from the classification date up to the final closing date to be able to accomplish the whole exchange process. These dates cannot be stretched according to your needs. You must accomplish the deal within the time allotted by the IRS to take benefits out of complimentary tax treatment. If the 180th day is Sunday, you cannot get an extra day. It is exactly 180 days regardless of any day it might fall.

Look for a buyer for your property. The person that might purchase your property is not exchanging your property for their property. You are not forced to buy their property even though the 1031 exchange is referred to as an exchange deal. The exchange only happens through a QI holding then only exchanging the title of the property to all parties later.

It can be referred as a person who enters a contract along with you to transfer any asset that you give up to acquire the new property you choose to replace. This new property will replace your old property. The 1031 exchange can limit your right to borrow, pledge, and receive benefits or any property by the qualified intermediary. All this can greatly help you in engaging into this 1031 exchange. If you have a lot of assets it means more good investment for your business.

Author Bio: Written by William Jonas – Bristol 1031 Exchange Services, Inc. provides 1031 tax deferred solutions to real estate investors nationwide. Costa Mesa, CA 92626.

Article Source: http://EzineArticles.com/?expert=William_Jonas
http://EzineArticles.com/?Rules-and-Requirements-For-1031-Exchange&id=3292689

With a 1031 property, you will be able to delay or defer taxes. This means that you can take the money that you would normally pay in taxes and apply that to the purchase of another investment property. But of course, as with anything else, there are some restrictions and guidelines that you will have to follow.

Once you read through them all, you should have no problem at all understanding just what it is exactly that you have to do. You want to make sure that you are looking carefully at two things such as the qualified property types and the timelines that you are working with. Even the most qualified property will not do you any good if you are not within the given timelines for the 1031 properties.

So just what is a 1031 property? To start with, it has to be an investment property. This is not a place you are calling “home”. This means that the property is used solely as an investment, a way for you to make money. Even though you cannot call it “home”, others can. This means that your qualified property could be a single or multi-family property that you have rented out, as an investment. The list of 1031 properties that qualify also include large apartment complexes that you own.

You have the 1031 property that you already own and that you are selling and then you have what is called the replacement property. This is what you are getting in exchange for selling the other property. This is not a trade between just two individuals or investors, although it can be. You can sell your first property to Mr. Smith and then purchase another property from Mr. Jones. It does not matter who is who, as long as the new property you are purchasing is valued at an amount that is equal to or greater than the property you are selling.

Even if the property is only valued at $30,000 more than the first, that is fine. In many cases, you can actually purchase several different 1031 properties that when combined, add up to be a value that is equal to or more than the value of the property you sold. This is a perfect option for those who want to diversify their portfolio and expand on their wealth.

Basically, you are improving your wealth by stepping up into a better investment. You have to use a third party to hold and transfer your money. You also have to use the equity gained in the property you sold to purchase the new property. Even though this may seem like you are not making out because you are walking away with tons of spendable cash in your hands, you real are. You will have increased your equity and your total estate worth. In the end when it comes down to it, you will have made a tremendous amount of money if you have been playing your cards right.

If you still find yourself confused about which properties are 1031 properties, you want to make sure that you are researching that information now. You do not want to wait until the very last minute. By doing this, you will find yourself in for a world of trouble because you just might miss out on the entire 1031 property exchange all together.

Within forty five days of the sale of your first property, you have to be able to name the property that you would like to purchase and include in your deal as a 1031 property. And then you only have one hundred and eighty days from then to make sure that the deal goes through. If your IRS taxes are coming up due sooner than one hundred and eighty days, that is the date you want to use as your due date for the 1031 property exchange.

Read up as much as you can about the 1031 property exchange so that you can make sure that you are getting the very best deal possible. Since the whole idea behind real estate investments is to make as much money as possible by spending as little as possible, this is a deal that you simply cannot afford to pass up. Go over all of the IRS guidelines for this tax deferment so that you are ready for anything that comes your way. The more prepared you are, the better luck you will have at getting the 1031 properties to work for you financially.

Many have heard about the 1031 exchange when real estate topics come up. Most people do not understand exactly what the 1031 rules are, except that it has something to do with the IRS. The IRS 1031 is something that you want to get yourself familiar with. If you find that it is a little confusing to understand at first, you may have to go over the information a few times. In reality, it is not a hard concept to get, but it may take a few glances over the 1031 tax regulations to understand them fully, especially if you are getting you information straight from the IRS site. This site tends to scare some people off because of the terms used.

To put it simply though, the 1031 is a strategy that is used when you are selling one property and proceeding with the acquisition of another piece of property within a certain time frame from one another. Each property must qualify for the 1031 though so that is something you have to check into each time you want to take advantage of this great benefit. Again, it may at first seem like a lot of hassle but in the end there are great rewards. The 1031 rules are there for everyone to see so that they can be taken advantage of. If you do not take advantage of what the 1031 exchange has to offer, you are certainly going to find yourself missing out.

Even if the selling and the buying of properties, happens on different days, the 1031 exchange, acts just as that, an “exchange” of properties. What does this mean to the average investor? It might just mean thousands of dollars in savings! Property exchanges through the 1031 are not taxable while sales are. This means that you do not have to pay certain taxes on a property you sold because you are “trading” or “exchanging” properties.

So, what properties can qualify for the exchange? Any “like kind” properties are considered enough to qualify for the 1031 exchange. You also want to make sure that you clearly understand all of the rules of the 1031 exchange in order to gain the most benefits from it. It is up to you to identify a property, or properties, that you wish to be considered as a replacement. You have exactly forty five days from the date of the sale of your property to identify the replacement properties. This is forty five days exactly. Even if the cut off lands on a weekend or a holiday, it is the cutoff, there are no exceptions.

After you identify the replacement property, under the 1031 exchange rule, you have one hundred and eighty days to physically receive the new property or else you no long qualify. These one hundred and eight days begins to count as soon as you relinquish the first property. Even if the end date lands on a holiday or a weekend, the end date does not change. There are cases where the deadline for this exchange is sooner. If the due date for the tax return is due prior to the one hundred and eighty days, the due date changes. Whichever situation happens first, that is when everything is due.

For someone looking to save thousands of dollars, taking advantage of the 1031 tax regulations is the way to go. Whether this would be the first and last time you would find yourself in this situation or you plan on dealing with many sales and purchases of properties, you want to make sure that you are doing your best to learn all of the 1031 rules for yourself. You just never know when the information will come in handy in the future.

Even if you hire a real estate attorney or an accountant, you still want to make sure that you completely understand the IRS 1031 exchange. Even though you have some people working for you, it is ultimately up to you to make sure that you are saving the most money possible. The more money you save, the more real estate you can invest in. Look up the technical information and take advantage of advice you receive from professional investors in the field. A few minutes of your day can save you thousands of dollars. It is certainly worth that much time to you.