Connecticut 1031 Exchange

   The 1031 Exchange is a powerful financial tool whereby the investor can defer the federal income taxes incurred when investment property is sold.

   The exchange is a process where documents create the exchange, and the transaction must meet the regulations established in Section 1031 of the Internal Revenue Code.

Some important points of the 1031 process include:

• The relinquished property must be a qualifying property- one that was held for investment purpose or property used in a trade or business. The investor should determine if the property they are considering for the 1031 exchange qualifies before beginning the marketing/sale process.
• The replacement property must be a "like kind" property. The rules here have been somewhat relaxed - however the replacement property still must fall within certain parameters that resemble the relinquished property. Your real estate profession can help you identify like kind properties suitable for exchange.
• The exchange facilitator must be a qualified intermediary. The qualified intermediary receives and holds the proceeds from the sale of the relinquished property- and closes on the replacement property with those held funds. The exchanger (taxpayer) must never have access to the funds to qualify for tax deferral.
• As a rule of thumb, in order for the transaction to be a complete tax deferral - the exchanger must purchase replacement property of equal or greater value than the relinquished property. Further, the exchanger must have financing that is equal to or greater value than the financing on the relinquished property that was paid off at close.
• Times Clocks governing the periods in which replacement properties must be identified and then purchased must be strictly observed.

   At Connecticut Income Properties we work with investors to:

- Sell 1031 Exchange Properties

- Identify 1031 Exchange Properties

- Buy 1031 Exchange Properties

   For more information on how we can assist you with your 1031 transaction and the tax savings opportunity the regulation allows - call or e-mail today.