ReSure Financial

Tax deferral and reporting for a failed 1031 exchange

If a 1031 exchange started in 2024 "failed" in 2025, you may still get tax deferral.

If a 1031 exchange straddles taxable years, capital gain is recognized in the year the funds become available to you (i.e., when the exchange period ends), not the in the year of the sale.

>If you sold property in late November or in December, your exchange straddles 2 years.

>If you sold property within the last 6 months of the prior year and ID'd 1031 replacement property, your exchange straddles 2 years.

When filing taxes for 2024, make sure your accountant is aware of any 1031 exchanges, even the ones that failed.

For a helpful and informative resource, click to read all about Deferring taxes with a failed 1031 exchange:

Defer taxes with a failed 1031 exchange! If a 1031 exchange straddles taxable years, gain is (typically) recognized in the year the funds become available, not the in the year of the sale.In plain English: Even a failed 1031 exchange prov...

Strategic and compliant 1031 ID is key to a successful exchange

For your 1031 Replacement Property to be "like kind" it must be IDENTIFIED before the end of the 45-Day Identification Period.

For a property to be "identified" in a 1031 exchange:

>ID must be provided on a SIGNED WRITTEN DOCUMENT
>ID must be hand delivered, mailed, telecopied, or otherwise sent. before the end of the identification period
>ID must be include UNAMBIGUOUS DESCRIPTIONS of the replacement property
>Replacement property actually acquired must be “substantially the same” property as that identified.

(Not to worry... the ID forms provided by ReSure, and most quality QIs, are formatted with helpful rules and tips, include a signature line, and identify the exchange to which the ID pertains.)

Although identification is nearly always made to the QI, the regulations do allow the identification to be made to other parties to the exchange. This could provide a fallback position if the identification made to the QI is late.

1031 ID must be approached strategically and compliantly!

Click the following link to access a comprehensive resource for 1031 ID Rules, Deadlines, and Helpful Tips:

1031 ID Rules, Deadlines, and Tips There are two 1031 exchange deadlines you must track: ID deadline Exchange deadline The ID Deadline👉 You must identify your 1031 replacement property.👉 For your 1031 REPLACEMENT PROPERTY to be "lik...

📢Don't let the tax filing deadline end your 1031 exchange

👉If you started a 1031 Exchange towards the end of 2024, get a tax filing extension.

1031 Exchange Replacement property must be acquired during the exchange period, which ends at the sooner of:
▶️180 days from the date of sale
▶️the due date of the tax return for the year of sale

Unless a tax filing extension is obtained, an ongoing 1031 exchange started during 2024 ends at 3/15/25 or 4/15/25, depending on the type of tax entity the exchanger is.

Click to access an interactive 1031 exchange timeline calculator:

1031 Exchange Timeline Calculator - ReSure Financial 1031 Exchange Timeline Calculator A 1031 Exchange requires meeting very strict deadlines for successful completion. Use this calculator to help you determine the deadlines for the 45-Day Identification Period and the 180-Day Exchange Period based on the closing date you provide for the relinquished....

🔖Bookmark this 2024 MAX TAX Deduction Calculator🧮

👉NOW is the time that smart investors and entrepreneurs are doing 2024 tax planning.

👉Tax-favored retirement account contributions can slash your tax bill while creating opportunities for tax-free ROI.

Following is a link to ReSure's online and interactive calculator to help you with your 2024 tax planning.

The calculator helps you compare, contrast, and strategize for the following tax-advantaged retirement accounts:
▶️Solo 401(k)
▶️SEP-IRA
▶️SIMPLE-IRA
▶️Profit-Sharing Plan

Click below to access an interactive max tax deduction calculator👇

https://www.resurefinancial.com/solo-401k-qrp-max-contribution-calculator-2024/

Checkbook Solo 401K, QRP, SEP IRA, SIMPLE IRA, Profit Sharing: Max Contribution Calculator 2024 - ReSure Financial QRP, 401k, Solo 401(k), SEP-IRA, SIMPLE-IRA Max Contribution Comparison Self-employed individuals and businesses employing only the owner, partners and spouses have several options for tax-advantaged savings: an Individual 401(k) plan, a SEP IRA, a SIMPLE IRA, or a Profit Sharing plan. Each option h...

Final opportunity for investors and entrepreneurs to tweak 2023 tax results using retirement account contributions.

Tax-favored retirement account contributions can substantially reduce your tax bill while creating opportunities for tax-free ROI.

Following is a link to ReSure's online and interactive calculator to help you with your 2023 tax planning.

(2024 Calculator to be shared in a subsequent email.)

The calculator helps you compare, contrast, and strategize for the following tax-advantaged retirement accounts:
▶️Solo 401(k)
▶️SEP-IRA
▶️SIMPLE-IRA
▶️Profit-Sharing Plan

https://www.resurefinancial.com/solo-401k-qrp-max-contribution-calculator-2023/

Checkbook Solo 401K, QRP, SEP IRA, SIMPLE IRA, Profit Sharing: Max Contribution Calculator 2023 - ReSure Financial QRP, 401k, Solo 401(k), SEP-IRA, SIMPLE-IRA Max Contribution Comparison Self-employed individuals and businesses employing only the owner, partners and spouses have several options for tax-advantaged savings: an Individual 401(k) plan, a SEP IRA, a SIMPLE IRA, or a Profit Sharing plan. Each option h...

🔖Bookmark this Interactive 1031 Exchange Tax Calculator🧮

3 Key 1031 Exchange Tax Formulas🧑‍🏫

👉To completely avoid taxes, both the VALUE and EQUITY in the replacement property must be at least equal to the VALUE and EQUITY in the relinquished property

👉To the extent that either VALUE or EQUITY in replacement property is less than VALUE or EQUITY in the relinquished property, you are taxed on the GREATER OF:
▶️the trade down in value and
▶️the trade down in equity

👉Your tax basis in replacement property equals its cost, less the amount of gain deferred through the 1031 exchange.

Click below to access an interactive 1031 exchange tax calculator.⌨️

https://www.resurefinancial.com/1031-exchange-calculator/

1031 Exchange Tax Calculator - ReSure Financial 1031 Exchange Calculator This 1031 Exchange calculator will estimate the taxable impact of your proposed sale and purchase. To pay no tax when executing a 1031 Exchange, you must purchase at least as much as you sell (Net Sale) AND you must use all of the cash received (Net Cash Received). If you ta...

🔖Bookmark this 1031 Exchange Timeline Calculator🧮

Real estate investors using a Section 1031 exchange to defer taxes need to be aware of - and plan ahead for - 1031 exchange deadlines.

👉For your 1031 REPLACEMENT PROPERTY to be "like kind" and qualify for tax-deferral it must be IDENTIFIED before the end of the 45- day IDENTIFICATION PERIOD.

👉Replacement property must be acquired during the exchange period, which ends at the sooner of:
▶️180 days after the transfer of the relinquished property
▶️the tax return due date for the year during which the relinquished property was transferred

Click below to access a handy 1031 exchange timeline calculator.⌨️

https://www.resurefinancial.com/1031-exchange-timeline-calculator/

1031 Exchange Timeline Calculator - ReSure Financial 1031 Exchange Timeline Calculator A 1031 Exchange requires meeting very strict deadlines for successful completion. Use this calculator to help you determine the deadlines for the 45-Day Identification Period and the 180-Day Exchange Period based on the closing date you provide for the relinquished....

📢Real Estate Tax Bulletin: 100% Bonus Depreciation is no longer close to coming back😞

The Tax Relief for American Families and Workers Act of 2024, containing attractive real estate tax provisions, passed the House in January 2024 with strong bi-partisan support and was expected to become law.

Unfortunately, as of August 1, the Senate failed to pass the TRAFWA by a vote of 48 to 44. 60 votes were required for it to pass the Senate.

Key provisions of the bill, impacting real estate:
▶️100% bonus depreciation through the end of 2025
▶️Increasing interest tax deductions
▶️Increasing Section 179 tax deductions

At this stage, it's unlikely that there will be any significant tax legislation passed until after the November 2024 election.

https://members.resurefinancial.com/posts/the-trafw-act-of-2024-what-real-estate-investors-need-to-know-and-do

The TRAFW Act of 2024: What Real Estate Investors Need to Know and Do Status update, 8/1/24 : Unfortunately, the Senate failed to pass the American Families and Worker’s Act of 2024 (TRAFWA) by a vote of 48 to 44 (it required 60 votes to pass). The Tax Relief for Ame...