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Ref. : Local Newsbriefs
Ref. : Letters to the editor
06.24 Mr. Holder, You Must Hold Torturers Accountable
06.29 Thinking about Climate
06.26 False Health-Scare Ad on CNN
06.25 Louella Learns the Limits of Medicare
06.23 The Simple Answer to America’s Health Care Crisis: Medicare for All
06.23 Tell ABC: Include Single-Payer in Healthcare Debate
06.23 Serving the Medical-Industrial Complex
06.22 Thinking about Recoveries
06.20 Obama's Health Care Waterloo
06.15 Obama, Like Clinton Before Him, is Blowing the Chance for Real Health Care Reform
06.11 Two Key Health-Care Numbers
06.10 Big Breakthroughs for Single Payer Health Care
06.10 Readying Americans for Dangerous, Mandatory Vaccinations
06.29 WP's Connolly Back, on Health Reform
06.17 Hypocrisy and Hope: Western Coverage, Iranian Courage
06.15 Excusing Outrages of the Right
06.11 Tying Obama to Bush's Budget Mess
06.30 Obama's Torture Hypocrisy
06.30 Court Circular: Annals of Imperial Continuity
06.29 Obama, They Want You to Fail
06.26 Who to Trust on a Truth Commission?
06.26 Tarnished Shields: The Morally Bankrupt 'Family Values' Republican Leadership
06.25 America's "Bases of Empire"
06.24 Twelve Angry White People: Jury Nullification in a Pennsylvania Coal Town
06.24 Touring Empire's Ruins
06.23 Employers are Undermining the Economic Stimulus Program
06.19 Criminalizing Dissent: Obama Pot Calls Iranian Kettle Black
06.17 Afghanistan's Operation Phoenix
06.16 Are You Ready for War with a Demonized Iran?
06.13 Where's the Anger as the Wheels Come Off Obama's and the Democrats' Recovery Program?
06.10 Waiving the Rules for Old Glory
06.10 Obama's Era of Openness Is Closed
07.03 Reviewing Marjorie Cohn and Kathleen Gilberd's "Rules of Disengagement"
07.01 Iraq: A Bitter Strategic Failure
06.25 It's All Good, Again: 'Uptick' in the American-Made Tides of Violence in Iraq
06.22 Obama Opposes Plame-gate Release
06.21 Dexter's Legions: The "Good" Killers of the "Good" War
06.18 Extending the Tradition: Proudly Taking American Torture Into the Future
06.15 New UN Report Denounces America's Human Rights Record
06.14 Fear Rules
07.01 Michael Hudson's "Super Imperialism:" The Economic Strategy of Imperial America
06.23 Obama's Financial Reform Proposal - A Stealth Scheme for Global Monetary Control
06.10 Cyberscares About Cyberwars Equal Cybermoney
07.01 Pirates of the Mediterranean
06.29 Color Revolutions, Old and New
06.25 Iran Divided & the 'October Suprise'
06.23 Astringent Corrective: AbuKhalil on Iran's Turmoil
06.20 Are the Iranian Protests Another US Orchestrated “Color Revolution?”
06.20 Through a Glass Darkly: Sifting Myth and Fact on Iran
06.19 Iran's Election and US - Iranian Elections
06.16 The Ir-Af-Pak War: Obama Looses the Manhunters
06.12 Israeli War Crimes Against Children During Operation Cast Lead
CONSUMER INFORMATION:
Why '1031 Exchanges' Interest Investors
Because of 2002 IRS clarifications, the 1031 exchange has become a very popular option for many real estate investors. A 1031 exchange (named after Section 1031 of the IRS code) is not a new idea. It was created in 1921 in order to allow for a reciprocal transfer of certain types of property. In the past, abiding by the very strict requirements of the 1031 caused investors to choose other options when selling their real estate. Now, with Tenants-in-Common (TIC) ownership, the popularity of the 1031 has been increasing significantly. Since 2001, the amount of money invested in TICs has roughly doubled each year. It is believed that TICs will reach more than $5 billion in 2006.
A 1031 exchange is usually a three-way delayed exchange in which an intermediary is used to facilitate the transaction. There are four basic steps:
- The seller arranges for the sale of property and includes exchange language in the contract.
- At closing, sales proceeds go to a Qualified Intermediary for a 1031 exchange.
- The seller must identify potential exchange properties within 45 days of the closing.
- The seller must complete the 1031 exchange within 180 days of closing.
The power behind the TIC
There are risks involved
While a TIC investment provides many benefits, you should also be aware of the risks and limitations of such an investment. TIC interests are not freely transferable, and there is no secondary market for these interests. Cash distributions and potential property appreciation are not guaranteed. Also, investors in a TIC are subject to the typical risks of real estate ownership such as economic influences, occupancy rates, and tenant risk.
Some Dos and Don’ts
- Do advanced planning for the exchange and talk to your accountant, attorney, and financial advisor prior to selling a property.
- Do not miss your 45-day identification deadline as this will disqualify the entire exchange, and expose you to possible tax liabilities from the sale.
- Do keep in mind that you must receive only “like-kind” replacement property in the U.S. (i.e., you can exchange any real estate investment for any other type of real estate investment; for example, vacant land can be exchanged for an office property; an apartment can be exchanged for a retail property), must use all proceeds from the sold property for purchasing the replacement, and make sure the debt on the replacement property is equal to or greater than that on the relinquished property.
- Do not try doing a 1031 exchange yourself using your CPA or attorney to hold title or funds. IRS regulations require a Qualified Intermediary to properly complete an exchange.
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This story was published on June 21, 2006.
