Structured Sales - 1031 Exchange

A 1031 Exchange is a very powerful way to defer capital gains tax on the sale of appreciated assets. However, there are very strict requirements that need to be met in order to qualify.

Because life is unpredictable, there are any number of things that can stand in the way of successfully completing the transaction within the prescribed time frame.

Changing market conditions can make it impossible to find the right property. The property can fail to pass inspection or the title may be clouded. The financing can fall through at the very last minute for any number of reasons.

Whatever happens, if you miss the deadline, the taxes immediately become payable.

However, the inclusion of a brief Structured Sales provision in your 1031 Exchange Agreement can preserve your option to defer taxes in the event things don’t work out as planned.

In addition, Clients can use a Structured Sales Strategy to cover the “Boot” when they execute a 1031 Exchange for a property of lesser value to defer taxes on the remaining proceeds.

Sometimes a willing seller backs out of 1031 exchange because of the tax consequences they will face after the sale. A Structured Sales Strategy can be used to help a Seller defer taxes on a property they are selling to complete a 1031 Exchange

Finally, after years of building a tax deferred asset portfolio, some clients may want to cash out without triggering an immediate capital gains tax bill. They can do so using Structured Sales Strategies.