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Field Guide to 1031 Exchanges

(Updated January 2013)
Section 1031 of the U.S. Internal Revenue Code allows investors to defer capital gains taxes on the exchange of like-kind properties. 1031, or tax-deferred, exchanges hold great advantages for both investors and REALTORS®. This field guide provides access to articles, manuals, forms, ideas, and other information to help you start building your 1031 niche. (F. Heller, Manager, Virtual Library & Archives)


1031 Exchanges: The Basics

Hot Swap: Property Exchanges: As boomers retire and relocate, these tax-deferred deals offer a sweet way to offload real estate investments, (Financial Planning, Dec. 2012). Q

How to Buy Like-Kind Exchange Property, (Bankrate.com, Sept. 13, 2012).

Ten Things to Know about 1031 Exchanges, (Forbes.com, Jan. 26, 2010).

Internal Revenue Code Section 1031, (Wikipedia).

1031 Exchange Manual, (1031 Corporation).

1031 Exchange FAQs, (Federation of Exchange Accomodators).

Compound logic: The Wealth-Building Power of 1031 Exchanges Just Makes Sense, (Commercial Investment Real Estate, Sept.-Oct. 2008).

1031 Exchange Do's and Don'ts, (National Real Estate Investor, Aug. 1, 2007).

Source: 1031 Exchange: How Does It Work? (Expert Real Estate Tips with Ilyce Glink, 2008).


Rules, Forms, & Guidelines from the IRS

Like-Kind Exchanges - Real Estate Tax Tips (2013).

Form 8824, Like-Kind Exchanges

Publication 544: Sales and Other Disposition of Assets

Internal Revenue Code, Part 1: Income Taxes - Common Nontaxable Exchanges


1031 Exchanges for REALTORS®

The ‘State of the Art’ in Like-Kind Exchanges, 2012, (Journal of Taxation, May 2012). Q

1031 Timing: Reverse Exchanges Can Go in Either Direction, (Commercial-Investment Real Estate, May-June 2012).

Are Underwater Like-Kind Exchanges the Answer?, (Journal of Taxation, Nov. 2011). Q

1031 Exchanges in a Foreclosure Situation, (BiggerPockets.com, Mar. 5, 2010).

Like-Kind Exchanges: Issue Summary, (National Association of REALTORS®).

Quiz: 1031 Exchanges, (REALTOR® Magazine Online).

How to Maximize your 1031 Exchange, (National Real Estate Investor, Mar. 2010). Q

CID 1031 Tips, (Commercial-Investment Real Estate, Sept.-Oct. 2009).

What Happens When you Sell an Exchange Property at a Loss?, (Realty Times, Mar. 5, 2009).

Exchange Your Strategy; Investors Should Consider Alternatives to 1031 Transactions, (Commercial-Investment Real Estate, Nov.-Dec. 2008).

1031 Exchanges: Tax-Deferred, Not Tax-Free, (REALTOR® Magazine Online, Nov. 5, 2008).

Housing Counsel: Like-kind Starker Exchange, (Realty Times, Feb. 26, 2007).

Vacation home swaps get safe harbor, (Journal of Accountancy, July 2008). Q


Tenancy-in-Common (TICs)

IRS offers lenience for beleaguered tenancy-in-common investors, (Real Estate Taxation, 4th Quarter 2010). Q

Can TICs Survive in the Existing Real Estate Market?, (Realty Times, Apr. 21, 2010).

Commercial: Has Time Run Out? Sales of tenant-in-common interests have plummeted, but don't count the securitized real estate industry out just yet, (REALTOR® Magazine, Sept. 2009).

TIC Tactic: The Delaware Statutory Trust offers 1031 Alternative for Group Investors, (Commercial-Investment Real Estate, May-June 2009).

Tenants in Common: Issue Summary, (National Association of REALTORS®).


Websites

Guide to 1031 Exchanges: Basics, Resources & Intermediaries (BiggerPockets.com) -- Quick overview of how 1031 exchanges work, with links to recommended resources and a list of qualified intermediaries.

Federation of Exchange Accomodators (FEA)—Professional organization for exchange specialists. Includes directory of exchange companies & specialists around the U.S.

Glossary of Real Estate Exchange Terminology—Basic glossary of exchange-related terms, from Asset Preservation, Inc. and James A. Smith.


Research on Your Own!

To search for the most recent articles on this topic, login to NAR’s ProQuest account and enter subject terms such as:

  • Real Estate and Like-Kind Exchanges
    • Enter into ProQuest text box as SUB(“real estate”) AND SUB(“like kind exchange”)

eBooks & Other Resources

Our eBooks collection contains a plethora of both audio and electronic books for learning a diversity of foreign languages and cultural etiquette standards. Below you will find a sampling of materials available; to identify additional materials visit our Library Catalog Advanced Search page and search for Subject: International or Subject: Foreign

How to Invest in Real Estate And Pay Little or No Taxes: Use Tax Smart Loopholes to Boost Your Profits By 40% (Adobe eReader)

The Tax-Free Exchange Loophole: How Real Estate Investors Can Profit from the 1031 Exchange (Adobe eReader)

Books, Videos, Research Reports & More

The resources below are available for loan through Information Central.  Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10.  Call Information Central at 800.874.6500 for assistance.

Building Wealth through 1031 exchanges, By Thomas Moylan & Moore McLaughlin, (All States 1031 Exchange Facilitator, LLC, 2006).

1031 Exchanges: How They Work, (Professional Exchange Accomodators, LLC. 2005).

The Tax-Free Exchange Loophole, By Jack Cummings, (John Wiley & Sons, Inc., 2005).

Field Guides & More

These field guides and other resources in the Virtual Library may also be of interest:

Field Guide to Investing in Real Estate

InfoCentral Blog

Information Savvy!

Many websites, such as Wikipedia, can be great resources to quickly orient yourself on a subject before conducting more in depth research. However, anyone in the world can create and maintain a website or write a seemingly legitimate article and may, intentionally or unintentionally, publish false or “misinformation.” When reviewing information on the Internet, you should always consider the ABC’s:

  • Accuracy. Ismag the information accurate? Can you confirm the same information using other resources published by a different author or organization?
  • Author. Who composed the information? Can you easily identify the author and contact the author or website publisher?
  • Bias. What bias might the author or author organization have?
  • Credibility. What are the author’s or author organization’s credentials for publishing the information? What expertise, experience, or education does the author have in this area that makes him or her qualified to write on the subject matter?
  • Currency. When was the web page last updated? Is it possible the information might have changed since this web page was last published?
  • Critical eye! Remember to always use your discretion and critical eye to determine whether information you find on the web (or even in books and news sources!) is trustworthy. Putting websites to the ABC test will get you started in developing a strong critical eye.

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The inclusion of links on this field guide does not imply endorsement by the National Association of REALTORS®. NAR makes no representations about whether the content of any external sites which may be linked in this field guide complies with state or federal laws or regulations or with applicable NAR policies. These links are provided for your convenience only and you rely on them at your own risk.