Reverse 1031 Tax Free Exchange – Hello there. That’s Shana Acquisto. Hello there. Luxury real estate broker, and I’m Mike Acquisto. That’s my real estate brokers husband.

Reverse 1031 Tax Free Exchange

Yes, that’s what I would be. And we’re going to talk about reverse ten thirty one exchanges, not just at ten thirty one exchange, but reverse 1031 exchange. What is it. How can I do it right. I’m going to assume that you already know at ten thirty one exchange it is as we’re kind of explaining this. Right. But let’s go ahead and share our screen and pull it up over here and see what we come up with guys.

There’s more there’s more girls and guys find it is real estate, that’s OK. So what we have here is the 1031 exchange process. It’s basically done in reverse. So take this link and we’re going to give it to you and we’ll chat it in the description. You’ll see that down below the like button, just like slam on that as you go by and then grab this link for you. But the concept of a reverse ten to ten thirty one exchange is you go ahead and purchase the property first. Before you sell out.

So like a bridge loan. Kind of, yes, but with the temporary one exchange, you’re essentially exchanging like kind property for some tax ramifications so that you can benefit yourself. Right? Avoid taxation. But this situation is you find a property first and you really like it and you’re like, oh, this is what I want to buy. Because sometimes people say, I don’t want to sell until I find what I want to buy. Yeah, right.

And you’re in a good a good financial situation. So this is something that can be utilized when you go ahead and find the correct property. And why these are going to become more popular now is because you’ll have people that have had good appreciation. Mm hmm. Which is our word of the day that we’re going to be defining here in one real estate word tying that right in. Right. It’s amazing how that works.

And you’ll have some tax consequences if you’ve earned too much income or too much capital gains from it from your real estate. And so this ten, thirty one exchange in reverse allows you to find the property first. OK, purchase it, get it under contract to close on it and then go ahead and sell your other property at a future date.

Wow, that’s amazing.

Yeah, it kind of helps you out. Well, yeah, I know. So if that this comes up and it’s important to you and you have a client doing one of these things, it’s a great opportunity to go ahead and do that. Sometimes people are buying maybe a second home or maybe they’re trying to buy a larger parcel and do something different. Right. This is an opportunity that they can go ahead and utilize that they have

To sell their primary. So if it’s for a secondary home. You said, would they necessarily need to sell their primary?

Well, if you’re using a reverse 10, 30 one exchange, then you’re implying that you’re selling something and moving it to the other. Now, you know, I don’t I didn’t get into the weeds about how many properties can you dispose of and how many can you turn it into. But with a 10 thirty one tax free exchange, you can sell one property and purchase multiples to add up to it. Now, not too many.

There are rules associated with it. And I don’t want to get into all the minutia here. If you are doing 10, 30, one exchange, then you should be dealing directly with a professional like a real estate agent who knows exactly what you’re talking about.

That is an option to keep. You know, we’re in a challenging market. So having another option available, I love that. It’s a great, great find.

Yeah. And this would be something like maybe for if you happen to have somebody that’s you have a farm client. Right. Maybe this is something that interests them to find a new property before they go ahead and want to sell. If you have somebody moving in, buying something unique, that’s just like, oh, wow, I wasn’t even thinking that was going to come up on the market. Right. So that’s a way to give them a search and set up this criteria for them and have to be able to execute on that and still be able to use a tax-free exchange. I love it.

Episode Recorded Live on YouTube 4.7.21

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