Refresh my memory. 1031 exchange is in simple terms exchanging like item (whatever that is) for like item or equal value.
Is my recollection correct?
If that’s it, what is your motivation for doing this as apposed to selling outright? Is your feeling you are getting a better deal?
Just wondering. I have never known anyone who engaged in this kind of transaction, so bottom line I am of no help here.
>> What kind of 1031 investment is out there that can shield a sudden value rupture?
“heck if I know” bookmark ping — I want to see what financially astute FReepers come up with
You might be able to 1031 into a triple net lease building like a CVS lease building or something. It will have to a have a close value. medical real estate used to be safe but I would not bet on it after ObamaCare.
Capital gain rates are 15% now and will be at least 20 to 24% later. Consider paying tax instead of deferring.
Depending on the amount of equity you are realizing and you intended goals should set you course of action. A NNN trade, a reverse exchange, paying capital gains prior to 2011, your depreciation recapture expense on top of capital gains, etc.
There are some high cap rates for lower-tiered chains (fast food franchises, oil changers, day care centers, other retai) or apartment, medical office or mixed-use properties.
There are some good buys, but remember cap rates, intrinsic value of location and certainty of cash flow dictate price.
Not sure how, or if a 1031 applies to commercial properties, but for residential, (in Ga), a 1031 applies to your primary residence only.(No rental, vacation or rehab/flipper properties). Keep all receipts for repairs, upgrades, property taxes and other expenses to offset your capital gains. If your investment property is in an LLC or S Corp, or other entity, there are other rules & options that apply.
Consult with a GOOD Real Estate oriented CPA. They may be somewhat expensive, but worth every penny if they know what they are doing.
Tulip bulbs, go with the tulip bulbs.