Exeter 1031 Exchange Services, LLC

STRATEGIES FOR SAVING A "FAILED" 1031 EXCHANGE Not able to identify replacement properties during your 45-day identification period? Confronted with a “failed” 1031 Exchange. Then this webinar Stayin' Alive After Your 45™ is for you! Discussion will include various strategies you can use to save a failed 1031 Exchange, including investments in a Qualified Opportunity Zone (“QOZ”). Join Bill Exeter, Chief Executive Officer, Exeter 1031 Exchange Services, LLC and Exeter Trust Company, and Charles Jensen, Western Divisional Director – Senior Vice President, Inland Securities Corporation, as they explore strategies and options for Stayin’ Alive After Your 45. Get strategies and ideas to save your “failed” 1031 Exchange! Host: William L. Exeter Chief Executive Officer Exeter 1031 Exchange Services, LLC and Exeter Trust Company wexeter@exeterco.com Charles A. Jensen Senior Vice President Inland Securities Corporation #TheExeterGroup #Exeter1031 #ExeterTrust #WilliamLExeter #InlandSecuritiesCorporation #CharlesJensen #CharlesAJensen #1031Exchange #DST #DelawareStatutoryTrust #RealEstate Recorded: 2023.04.20

I have to purchase my replacement property first, can I still qualify for a 1031 exchange? You may find yourself in a position where you must acquire your replacement property before you sell your existing property. Perhaps the sale of your existing property falls through and you must decide whether to proceed with the purchase of your replacement property or risk losing the opportunity. Perhaps you want to eliminate the risk involved with the 45 day identification requirement in a regular Forward 1031 Exchange by ensuring that you have your replacement property locked up. The Reverse 1031 Exchange allows an investor to proceed with the purchase of the replacement property before they close on the sale of their existing property. Just like any 1031 Exchange, you must retain the services of your Qualified Intermediary and have the Reverse 1031 Exchange in place prior to any closing. Your Qualified Intermediary will acquire and hold, which is referred to as parking, legal title to your replacement property. You then have 180 calendar days from the date your replacement property is parked to sell and close on your existing property. Reverse 1031 Exchange transactions have become significantly more popular in recent years. However, reverse 1031 Exchanges are significantly more complicated and require an expert. Call Exeter Reverse 1031 Exchange services for their expertise at 1-619-239-3091 or visit http://www.exeterco.com

I want to sell my vacation property, but I have a huge capital gain to worry about. Will my vacation property qualify for 1031 Exchange treatment? Did you know that you might be able to sell your vacation property or second home and qualify for 1031 Exchange treatment? If you own a vacation property or second home that you occasionally rent out, you may qualify for a 1031 Exchange when you decide to sell. The IRS issued a ruling that may allow an owner of vacation property or a second home to still qualify for tax-deferred treatment if they follow certain safe-harbor requirements. You must have owned the vacation property or second home for at least 24 months prior to the 1031 Exchange. You must have rented the property out for at least 14 days during each of those two years. Personal use of the property must be limited to not more than 14 days during each of those two years. You may still qualify for tax-deferred treatment even if you don't meet the above requirements, but it may involve some risk. 1031 Exchanges of vacation properties and second homes are complicated. That's why you need an expert. Call Exeter 1031 at 1-619-239-3091 or visit http://www.exeterco.com

"How does the replacement property identification process work in my 1031 Exchange?" There are very specific rules that limit the number of replacement properties that can be identified as part of your 1031 Exchange. The replacement property identification must be submitted to your Qualified Intermediary no later than 45 calendar days after the close of the sale of your existing property. You can change your mind as often as you wish as long as you are still inside the 45 calendar day identification period. You have three options for identifying your potential replacement properties, which include the three property rule, 200% rule, and 95% exception. The three property rule is the most common, which allows you to identify up to, but not more than, three properties of any market value. Investors usually identify three properties with the intent to acquire one property, but you could certainly acquire all three properties. The 200% rule allows you to identify as many replacement properties as you wish as long as the total market value of the properties does not exceed 200% of the net sale price of the property you are selling. The 95% rule allows you to identify any number of properties, at any value, as long as you actually purchase 95% of the total value identified. The identification process is complex, so call Exeter 1031 for guidance at 1-619-239-3091 or visit http://www.exeterco.com

Investors often ask "what kinds of property can I 1031 Exchange into?" The question is really "what is the definition of "Like-Kind" property?" The definition of "Like-Kind" is very broad when it comes to exchanging real estate. As long as the asset is defined as real property, it will satisfy the "Like-Kind" requirement. In other words, any kind of real estate is "Like-Kind" to any other kind of real estate. For example, if you own a single-family house, you can 1031 Exchange your property for any of the following: multi-family, office building, retail store, industrial building, condominium and even vacant land. You can also 1031 Exchange into Net Lease Properties such as a Walgreens, CVS or a fast food store, fractional ownership properties such as a Delaware Statutory Trust, also known asDSTs, investment property, or mineral rights, water rights, air rights and much more. Investors have lots of flexibility and choices when considering a 1031 Exchange transaction. To ensure you qualify for tax-deferred exchange treatment, be sure to call an expert. Call Exeter 1031 at 1-619-239-3091 or visit http://www.exeterco.com

A lot of people ask "What is a Qualified Intermediary?" A Qualified Intermediary or QI is also commonly referred to as an Accommodator or Facilitator for the 1031 Exchange transaction. The role of the QI is to guide you through the 1031 Exchange to ensure the rules are followed, allowing you to defer your taxes. A QI drafts the legal documents, safeguards your money, and consults with you and your advisors during the 1031 Exchange process. The QI works closely with you to make sure that all necessary paperwork is completed and your deadlines are met. When choosing a QI, you should choose one with the experience and expertise to guide you through the 1031 Exchange process. In addition, you should make sure they are licensed, bonded and insured to protect you and your funds during the 1031 Exchange. 1031 Exchanges are complex, that's why you need an expert! Call Exeter 1031 at 1-619-239-3091 or visit http://www.exeterco.com

What are the three types of 1031 Exchange transactions? When people think of a 1031 Exchange, they may not realize there are three structures to choose from. The three structures include the Forward 1031 Exchange, Reverse 1031 Exchange and Improvement 1031 Exchange. The most common structure is known as a Forward 1031 Exchange. In this transaction, you sell your existing property first and then purchase your replacement property later. In a Reverse 1031 Exchange, you purchase your replacement property first and then you sell your existing property later. In the Improvement 1031 Exchange, you sell your existing property and purchase a new property, with some of the proceeds used to make improvements on the new property. Not only can you 1031 Exchange real property, you can also 1031 Exchange personal property such as franchise agreements, livestock, airplanes, a fleet of vehicles, artwork, and much much more. 1031 Exchanges are complex, that's why you need an expert! Call Exeter 1031! 1-619-239-3091 or visit http://www.exeterco.com

How much time do I have to complete my 1031 exchange? 1031 Exchange transactions require investors to meet very strict deadlines. There are three key deadlines to consider when structuring your 1031 Exchange. First, you must retain the services of a Qualified Intermediary before any of your transactions close. Second, you have exactly 45 calendar days, starting the first day after you close, to identify your replacement properties. You must provide this identification of replacement properties to your Qualified Intermediary no later than midnight of the 45th day following the close of sale. Third, you have exactly 180 calendar days to complete your entire 1031 Exchange transaction, including the receipt of legal title to all replacement properties. The 180 day exchange period includes the 45 day identification period. These 1031 Exchange deadlines cannot be extended for any reason. 1031 Exchanges are complex, that's why you need an expert! Call Exeter 1031 at 1-619-239-3091 or visit http://www.exeterco.com

"How much do I have to reinvest in order to avoid paying capital gains taxes?" We are often asked "Do I have to purchase a replacement property equal to my sales price or just the amount of my capital gain?" The 1031 Exchange allows you to defer the payment of all taxes as long as you remain fully invested. In order to remain fully invested, you should follow three guidelines. First, the replacement property that you purchase should be equal to or greater in value than the net sale price of the property you are selling. You compute the net sale price by deducting the routine selling expenses from your gross sales price such as broker's commissions, title charges, escrow fees, recording fees and exchange fees. You compute the net purchase price of your replacement property by adding the routine purchase expenses to your purchase price. Second, you must reinvest 100% of the net cash proceeds received by your Qualified Intermediary from the sale of your existing property. Third, the amount of new debt (mortgage) on your replacement property will be the difference between the total purchase price less the net cash proceeds (equity) reinvested. If you purchase a new property that has a lower purchase price, or you take some of the cash equity out for personal use, you will recognize some of your tax liabilities. 1031 Exchanges are complex, that's why you need an expert! Call Exeter 1031 at 1-619-239-3091 or visit http://www.exeterco.com

What are the Qualified Use Requirements? Investors often ask "what am I allowed to do with my property?" The properties sold and acquired in a 1031 Exchange must satisfy the Qualified Use requirement. Qualified Use means the properties must be held for rental, investment, or business use. The critical issue is that you must have the intent to hold the properties for rental or investment purposes -- not for sale. The length of time you hold the properties is one factor in determining whether you meet the "intent to hold" requirement. It is generally considered safe if you hold your property for at least two years, reasonably safe if you hold for one year, and risky if you hold for less than one year. Investors who purchase property with the intent of fixing it up and selling it for profit (flipping), fail to meet the intent to hold test. The IRS considers flipping transactions to be held for sale -- not held for investment. 1031 Exchanges are complex, that's why you need an expert! Call Exeter 1031 at 1-619-239-3091 for visit http://www.exeterco.com

What are the steps involved in completing a 1031 Exchange? Now that you've decided to complete a 1031 Exchange, you may be wondering what the process looks like. Step one -- Once you are under contract for the sale of your existing property, but before you close, you need to retain the services of a Qualified Intermediary such as Exeter 1031 Exchange Services, LLC. Step two -- Your Qualified Intermediary will draft the necessary legal documents in order to properly structure your 1031 Exchange. You should also have your tax advisor review the estimated closing statement prior to closing. Step three -- Your net proceeds will be sent to your Qualified Intermediary for safekeeping at the close of the sale transaction. Step four -- You now have exactly 45 calendar days to identify your potential replacement properties to your Qualified Intermediary. Step five -- You now have exactly 180 calendar days to complete your 1031 Exchange. Once you are under contract for the purchase of your replacement property, but before you close, notify your Qualified Intermediary so they can draft the necessary legal documents. You should also have your tax advisor review the estimated closing statement prior to closing. Step six -- Your Qualified Intermediary will send your net proceeds to your closing agent in order to close on your replacement property. Congratulations, you have completed a successful 1031 Exchange. 1031 Exchanges are complex. Contact Exeter 1031 Exchange Services, LLC as your experienced Qualified Intermediary at 1-619-239-3091 or visit http://www.exeterco.com

One of the questions we often hear is "What are the benefits of a 1031 Exchange?" A 1031 Exchange is an excellent tool for building your wealth by keeping your money working for you by deferring the payment of your taxes and by increasing your cash flow. Let's say you bought a single family residence for $300,000. You rented the property for five years and it increased in value to $500,000. You now have a $200,000 capital gain. Now, let's say you're ready to trade up into a fourplex. If you sell the property, you will pay taxes on the $200,000 gain and have a much smaller amount to reinvest. However, if you do a 1031 Exchange, you can defer all of the gain into the fourplex. You have successfully increased your cash flow and net worth. 1031 Exchanges are complex, that's why you need an expert! Call Exeter 1031at 1-619-239-3091 or visit http://www.exeterco.com

One of the questions we often hear is What is a 1031 Exchange? Why should I use a 1031 Exchange? When should I use a 1031 Exchange? The sale of a rental property generally triggers capital gain taxes and depreciation recapture. It can also trigger the Medicare Surcharge often referred to as the Obamacare Tax. The 1031 Exchange is a way to defer the payment of the capital taxes, depreciation recapture taxes and triggering the Medicare Surcharge or Obamacare Taxes. The term 1031 Exchange is named after Section 1031 of the Internal Revenue Code. Typically, 1031 Exchanges involve the sale of rental or investment real estate. The benefit to the real property owner or investor is that they get to build their wealth faster by keeping all of their money working for them instead of paying taxes. There are specific requirements real estate investors must follow to qualify for tax-deferred exchange treatment under Section 1031. In order to defer all of their taxes, they must reinvest in one or more replacement properties of equal or greater value. They must identify their replacement properties and complete their 1031 Exchange within very specific tax-deferred exchange time frames. 1031 Exchange transactions are also referred to as tax-deferred exchanges, like-kind exchanges, starker exchanges, delayed exchanges or tax-free exchanges. 1031 Exchanges are complex, that's why you need an expert! Call Exeter 1031 Exchange Services, LLC at (619) 239-3091 or visit http://www.exeterco.com.