1031 Exchanges

Investors across the State of California know the frustrations of capital gains taxes all too well. For those that actively invest in property, however, a 1031 exchange may be a highly worthwhile option to consider. The escrow officers at Inspire are well versed in 1031 exchange guidelines and regulations, and have the in-depth experience to help make the process as straightforward as possible.

​Also known as “like-kind exchanges” and written into the IRS code itself, 1031 exchanges in essence involve the swapping of qualifying investment properties that substantially reduce or even eliminate the capital gains tax obligation at the time of the real estate transaction. In fact, these taxes can be set aside long term if not indefinitely, making 1031 exchanges a real boon for real estate investors.

​While 1031s come with some exceptional benefits, it is vital to note that the rules that govern them are quite stringent and intricate at times. With certain exceptions, 1031 exchanges can only be used when “like-kind” business or investment properties are involved. Thankfully though, there seems to be a great deal of latitude in terms of what can be thought of as “like-kind”. Other central stipulations involve the value of the properties, the usage of funds deriving from the transactions, and the timing of the transactions.

​Besides the various requirements involved, it’s also important to note that there are numerous types of 1031 exchanges that take place. As its name suggests, a simultaneous exchange occurs when the transactions on the properties conclude on the same day. While some investors will simply switch property deeds, others opt to have a 3rd party orchestrate everything.

​Delayed exchanges are ideal for those that want to part with their current property prior to acquiring the new one. The money stemming from the sale is then contained within a trust until the new investment property is found and purchased. Despite the fact that delayed exchanges provide individuals with additional time to get all matters taken care of, that time is by no means endless. A delayed exchange will only work if the new viable property is found within 45 days of the initial sale and closed on in no more than approximately 6 months (180 days).

Professional Like-Kind Exchange Services

Inspire Escrow has substantial experience assisting clients with all kinds of 1031 exchanges. As discussed above, there are extensive regulations governing these like-kind property swaps. Failure to strictly adhere to these regulations can nullify the benefits provided by a 1031 and ultimately force an investor to deal with the taxes they were trying to defer in the first place.

​With our commitment to providing unmatched service and a stress-free experience, our escrow officers are always available to answer questions and provide ample guidance on which type(s) of 1031 exchange would work best for particular circumstances. We will carefully manage all of the details to help ensure that the exchange takes place without a hitch. At Inspire, you get peace of mind knowing that our friendly, professional escrow agents will work with you, seven days a week.