1033 Exchange
Section 1033 of the IRS tax code offers investors the ability to defer capital gains tax on properties that are relinquished, condemned, or taken through various forms of government activities. There are several requirements that must be met in order for a property to qualify for a 1033. Seizure due to eminent domain is one of the most common qualifiers for 1033 exchanges, but if a property is destroyed by forces outside of the taxpayer's control or if it is seized due to the threat of condemnation, it can also qualify. While a 1033 exchange will help you avoid capital gains tax just as a 1031 exchange will, there are a myriad of differences between the two. In order to successfully complete a 1031 (using funds from the sale of an investment property), a qualified intermediary is generally needed. With a 1033, reinvestment does not have to occur with the help of an outside party. Time constraints also differ between the two. A 1031 must take place within 180 days, while you have two years to roll over a 1033 property. In both cases, the IRS will be involved somewhat in the exchange. With a 1031, the investor or broker must identify candidate properties to the IRS, and with a 1033 a specific election must be made in order to qualify. At TM 1031 Exchange, we work closely with brokers, investors, and owners to facilitate the sale of tax deferred properties. We provide in depth searches that feature properties that are often not available to the public, and we match parties with the investment that is right for them. To learn more about 1031 and 1033 exchanges, call 1-877-4-TM1031 or email team@tm1031exchange.com.
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