If you are able to qualify for a 1031 exchange, you will be able to benefit significantly from the perspective of your tax obligations. This is why 1031 exchanges are so desirable for many people.
It is common for property owners to have questions regarding the terms of 1031 exchanges and about their own eligibility. The following are some of the most frequently asked questions regarding 1031 exchanges in the state of Florida.
What are the time requirements associated with a 1031 exchange?
Timing is crucial in any 1031 exchange. In order to qualify, you must be able to nominate replacement properties for the one you are selling within 45 days of closing. Usually this will involve you choosing 3 properties that you are seriously considering.
What type of property qualifies for a 1031 exchange?
The property might be a family home, an office building or a parking lot. The important detail is the purpose you have with the property. You must be holding the property for investment of trade purposes only. Therefore, if you want to exchange a family home, this must not be a residence of yours, but instead an investment property.
What are the rules for the type of property I can exchange with?
You must exchange your trade or investment property with a like-kind property. This means that if you are selling an investment property such as raw land, you may be able to exchange with an apartment block.
If you want to learn more about 1031 exchanges in Florida, it is important that you conduct thorough research into the details of the law.