Know the Basics
Instead of immediately paying capital gains on the sale of a property (the “down leg”), many investors prefer to defer that payment by purchasing a new property (the “up leg”) with the proceeds. This is commonly referred to as a 1031 exchange, in reference to the section of U.S. tax code that defines it. There are specific rules and timelines related to a 1031 exchange, and it is important to have an experienced and knowledgeable specialist handling the process.
The Process
Successfully executing a 1031 is straightforward under the guidance of an experienced advisor.
- Lay the Groundwork – Speak with your real estate, financial and tax advisors to make sure a 1031 exchange is right for you. Understand the timelines and restrictions, and enlist a qualified intermediary to facilitate the transaction.
- Sell a Property – The specialists at Marcus & Millichap have access to the largest pool of qualified buyers in the industry, helping you sell your property quickly and at a good price.
- Identify Replacement – You have a limited time to make your next transaction, purchasing up to 3 replacement properties. Marcus & Millichap has the largest inventory of exclusive listings, giving you a range of excellent up leg options.
- Purchase – As the market leader in 1031 exchanges and in overall transactions, Marcus & Millichap has the experience and expertise to guide you through the closing process successfully and painlessly.
- Report Exchange – Your tax advisor must report the exchange on your tax return for the year in which you sold your down leg property.
Your Next Opportunity Starts Here
If you’re interested in increasing your returns, decreasing your management responsibility, or diversifying your holdings, a 1031 exchange may be the right choice for you.
With the largest inventory of exclusive listings, the largest specialist sales force of experienced agents, and all of the expertise that comes with executing more transactions than any other brokerage, Marcus & Millichap is uniquely positioned to help you maximize your options and your returns.
Explore our listings today to find your next investing opportunity.
