1031 Tax Deferred Exchange

About KC

KC Rentfro

My name is KC Rentfro and I am a licensed broker - associate with Swell Property based in Encinitas. Swell offers buy and sell representation, property management, vacation rentals, luxury homes, and design-build services. I am an honest, hardworking, and trustworthy real estate broker who will always have your best interest in mind. I am knowledgeable about all areas within San Diego, specialize in the coastal communities, and have a great list of contacts to assist your housing needs. If you are interested in buying, selling, investing, remodeling, relocating, or have questions on financing, give me a call. My work ethic, attitude, customer service, listening skills, market knowledge, and relaxed style are what separate me from others in my field.

I am a licensed Realtor here in San Diego who can provide guidance and contacts for your 1031 Tax Deferred Exchange needs. I have a great relationship with a local qualified intermediary who is a wealth of knowledge in this field and has a proven track record. Having a local resource such as myself who knows all communities within San Diego and is able to identify up and coming neighborhoods is important when completing an exchange here in San Diego. There are many factors to consider when preparing to sell an investment property such as tenants, lease agreements, notices to vacate, property condition, renovations, listing price, active & pending inventory, how you declared the income on your taxes, and the time of year you plan to sell. Each of play a role that you have to factor in and plan for in order to set yourself up for success. . As your Realtor, I can guide you through this process, provide honest straightforward feedback, and connect you with quality professionals needed to get the job done.

Swell Property Services

- Property Management

- Vacation Rental Management

- Design - Build

- Remodels

- Land Surveys

Affilliated Business Partner

IPX 1031 Exchange - Qualified Intermediary

What is Internal Revenue Code Section 1031?

Since 1921, Federal tax law under Internal Revenue Code (IRC) section 1031 has permitted a taxpayer to exchange business-use or investment assets for other like-kind business use or investment assets without recognizing taxable gain on the sale of the old assets. The taxes, which otherwise would have been due from the sale, are thus deferred. These can range from relatively simple transactions involving commercial, agricultural and rental real estate to more complex transactions involving aircraft, trucks, trailers, containers, railcars, agricultural equipment, other heavy equipment, livestock and other assets. Most 1031 Exchanges involve separate buyers and sellers and are not simple swaps between two parties. Under these circumstances, tax rules require the use of an independent third party Qualified Intermediary (QI). The QI holds the sale proceeds for the benefit of the taxpayer during the exchange, disbursing funds for purchase of like-kind replacement property, and returning any unused funds to the taxpayer at the end of the exchange. 1031 Exchanges must be completed within 180 days. Taxpayers recognize gain and pay tax on any unused funds or when they ultimately “cash out” of their property.

Like Kind Exchanges, also known as tax deferred exchanges, are defined by Internal Revenue Code (IRC) section 1031. A 1031 Tax Deferred Exchange offers taxpayers one of the last great opportunities to build wealth and save taxes. By completing a 1031 Exchange, the Taxpayer (“Exchanger”) can dispose of investment or business-use assets, acquire replacement property and defer the tax that would ordinarily be due upon the sale.

Since 1921, section 1031 has permitted a taxpayer to exchange business-use or investment assets for other like-kind business use or investment assets without recognizing taxable gain on the sale of the old assets. The taxes which otherwise would have been due from the sale are thus deferred.

A 1031 Exchange allows investors to defer Federal capital gains tax, state ordinary income tax, net investment income tax, and depreciation recapture on the sale of Investment property if certain criteria are met including:

Buy replacement property for equal or greater than sold for and reinvest all proceeds
Identify replacement property within 45 days of close of sale
Purchase replacement property within 180 days of close of sale
Must Sell and Buy property that is considered “like-kind” to each other
Process must be handled by a Qualified Intermediary (QI)

Reasons to Exchange

There are many reasons to exchange, such as:

Defer Taxes: Federal, State & Depreciation Recapture
Diversify or Consolidate a Real Estate Portfolio
Increase Cash Flow
Switch Property Types (Land, Industrial, Multi-Family, Office, Retail, Residential, Easements)
Get Into Other Real Estate Markets (Exchange anywhere within the U.S. & Territories)
Build & Preserve Wealth
Set up Heirs for the Future (Estate Planning: Stepped Up Basis)
Increase Purchasing Power

Qualified Intermediary Choice

Tax rules for non-simultaneous exchanges require the use of an independent third party Qualified Intermediary (QI). Prior to the transfer of the old investment property, the services of a QI are retained to prepare the necessary documentation, securely hold your exchange funds and acquire your new investment property. The QI holds the sale proceeds for the benefit of the taxpayer during the exchange, disbursing funds for purchase of like-kind replacement property, and returning any unused funds to the taxpayer at the end of the exchange. Choosing a Qualified Intermediary (QI) to handle your exchange is a critical part of your 1031 Exchange. Not all QIs are the same. IPX1031 is the best choice for your 1031. Here’s why:

Owned by Fidelity National Financial (NYSE: FNF)
Nationwide locations
$100M Fidelity Bond
$30M E&O Insurance
$50M Written Performance Guaranty
Segregated Bank Accounts
Knowledgeable Staff
Attorneys & Certified Exchange Specialists®
Full Service Qualified Intermediary
Superior Customer Service