By Anthony Migliore, Senior Advisor
Are you looking to defer taxes on the sale of your commercial property? A 1031 exchange may be the solution for you. A 1031 exchange allows you to sell your commercial property and reinvest the proceeds in a similar property without paying taxes on the sale. In this blog post, we’ll walk you through the process of a 1031 commercial property exchange and why it’s important to work with a qualified intermediary, attorney, and commercial real estate agent in the Jacksonville area.
Step 1: Sell Your Commercial Property
The first step in a 1031 exchange is to sell your commercial property. You must identify a replacement property within 45 days of the sale and close on the replacement property within 180 days.
Step 2: Choose a Qualified Intermediary
A qualified intermediary (QI) is a third-party professional who facilitates the exchange by holding the proceeds from the sale of your property and transferring them to the seller of the replacement property. It’s important to work with a QI who is knowledgeable and experienced in 1031 exchanges.
Step 3: Identify Replacement Property
You must identify a replacement property within 45 days of the sale of your commercial property. The replacement property must be of equal or greater value and meet other requirements outlined in Section 1031 of the Internal Revenue Code.
Step 4: Close on Replacement Property
You must close on the replacement property within 180 days of the sale of your commercial property. The QI will transfer the proceeds from the sale of your property to the seller of the replacement property.
Why Work with a Qualified Intermediary, Attorney, and Commercial Real Estate Agent?
Working with a qualified intermediary, attorney, and commercial real estate agent in the Daytona Beach area can help you navigate the complex process of a 1031 exchange and ensure that you meet all the requirements outlined in Section 1031 of the Internal Revenue Code. A qualified intermediary will help you hold and transfer funds during the exchange process. An attorney can provide legal advice and ensure that your exchange complies with state and federal laws. And an experienced commercial real estate agent can help you find the right replacement property and negotiate a favorable deal.
A 1031 exchange can be a great way to defer taxes on the sale of your commercial property. But it’s important to work with a qualified intermediary, attorney, and commercial real estate agent in the Jacksonville area to ensure that you follow all the rules and regulations of the exchange. Contact us today to learn more about how we can help you with your 1031 exchange.