1031 Exchange Investors: Be aware of 4th Quarter Transaction Deadlines

Investors should remain aware and review with tax professional about 1031 exchange transactions done at the end of year 2013. Investors may need to file an extension on their Federal tax returns to take advantage of capital gains benefits.

With the spike in commercial real estate activity, especially for single tenant net lease properties, investors should be aware of the tax ramifications of 1031 exchange transactions. If not properly advised, investors can make themselves ineligle for the full benefits of capital gains deferral unless they submit an extension on their April, 15th 2014 filing.

In our office we have worked with numerous new clients entering into the market for the first time along with seasoned investors using 1031 exchanges to acquire new properties. “Investors like this ability to utilize a 1031 to defer their capital gains but they should be fully aware on how it works and what ways to maximize their particular situation” says Dwaine Clarke, President of Clarke & Tinker Net Lease Property Group.

The 1031 exchange status explains that investors have 45 days after the date their property has been officially transferred to

 Kevin M. Levine, 1031 exchange investors filing extension

Kevin M. Levine

identify a new replacement property. From that point of indentification they have 180 days to complete an exchange or the date of the investor’s federal tax return for the year in which the transfer occured. What confuses most investors and some tax advisors is that “the code doesn’t clarify how to address capital gains deferrals when the full cycle of the transaction runs into the following calendar year.” says Kevin M. Levine, Executive Vice President of Peak 1031 Exchange Inc.

Investors also need to realize that not only you have 180 days between the sale of the initial investment property and the acquisition of the replacement, an extension can be filed allowing six months past the April 15th filing date. Investors are advised to speak with the tax professionals and advisers as well as to be aware of transaction and filing deadlines as well.

Whatever objective you have our goal is to assist you in considering what the best strategy for your particular situation. If you have any questions or would like to discuss your investment strategy feel free to contact us.

Dwaine Clarke is a published author and founder of Clarke & Tinker Net Leased Property Group, a commercial real estate sales and advisory firm located in Connecticut. Connect with Dwaine on Twitter and Linkedin

About the Author

Dwaine L. Clarke is the Founder and President of GCT Net Lease. GCT Net Lease is an investment real estate services firm exclusively focusing on Single and Mult-Tenant Net Lease Properties. The firm provides a full range of brokerage and advisory services nationwide to High Net worth Investors, Developers, REITs and Institutional Investment Funds. GCT Net Lease is headquartered in Windsor Connecticut. Dwaine is also a nationally recognized speaker and consultant. He is also the author of three best selling commercial real estate investing books. Mr. Clarke’s experience branches through close to over a decade of working with and for some of the nation’s top investors to purchase, underwrite, develop and manage millions of dollars in commercial investment real estate. For his case, he has not only assisted these investors, but also became a student of theirs. Through careful analysis he started to understand what these investment experts were doing, using top strategies to buy, manage and sell their investment properties for maximum profit. He especially took note of how these investors were leveraging their time and how they made their decisions without interfering with their personal or business lives. Mr. Clarke is also active in investing and creating real estate partnerships, providing a vehicle for high net-worth individuals to own income producing real estate.

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