Guides on how to perform 1031 exchanges with specific types of property or business. Check our 1031 Guide today.

1031 exchange rental property

1031 Exchange Rental Properties [Ultimate Guide]

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Do you know one of the most common ways to make your money work for you? Here in the United States, it is to invest in a rental property. Homeowners begin to realize fairly quickly this opportunity. They realized that purchasing a property and renting it to another is a great way to earn passive income. This is without having to perform that many day-to-day tasks. We will talk more about 1031 exchange rental properties in this article.

Of course, rental properties do not always pan out the way that some land and building owners had expected. Some properties may have trouble acquiring consistently paying tenants. Other assets may be better off sold for a tremendous amount of money.

With a large sale, comes large taxes. If you plan to sell your rental property, then it is important to be aware of the possibility of a 1031 exchange. This is one of the smart tools that many savvy investors are using. In this article, we will outline the steps necessary to 1031 exchange rental property and maximize the potential for reinvesting your funds.

How to Sell Your Rental Property

Of course, you can 1031 exchange rental property only once the property is sold. Rental properties are not by definition rental properties. Planning to sell your rental property to a new owner? Then they may live in the space part or full time without continuing the legacy of leasing out space.

With this in mind, coastal areas and vacation destinations are full of short-term rental properties. Whereas most American cities have long-term rental properties looking for monthly tenants. This can be in the residential, commercial, and industrial spaces.

With all of this in mind, there are essentially an unlimited amount of ways that you can go about selling your rental property. The secret is to find the right buyer and put the property in front of as many potential investors as possible. Today, this is most commonly useable by taking advantage of online retailers, specialty real estate agents, and property auctions

Determining the Value of a Rental Property

Depending on the type of property, a rental space can have a tremendous range of values. Rental properties are essentially a sum of their parts, but also have a lot of external factors to consider when putting a price tag on a personal asset.

In most instances, the value of a rental property is determinable by:

  • The size of the property
  • Number of buildings and building types
  • Property leasing history (short vs. long term)
  • Current physical condition
  • Market trends
  • And more

Of course, the true value of your rental property is only the amount that someone is willing to pay for it. Smart bargaining and demonstrated income potential will serve as allies when putting your rental property in the eyes of serious buyers.

In some cases, existing tenants may have an interest in purchasing the property that they are currently leasing. While this is saving them a ton of time and cost on moving, selling to existing renters is usually done so at a discountable rate if the relationship is strong thus far.

Taxes Paid on the Selling a Rental Property

Rental property sales are typically for a lot of money. Unfortunately, this means that rental property sales generally come with a large amount of taxes paid on the income generated from the financial exchanges. While landowners are no stranger to paying property taxes, most expenses applied to the sale of a rental property are one-time-only. These include:

  • Depreciation Recapture
  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

With governments taking their piece of the pie, it is not uncommon to pay as much as 40% in taxes on the sale of a large rental property. Some of this is avoidable, however, if taxpayers choose to utilize a 1031 rental property exchange.

1031 Exchange Rental Property

Rental properties are sellable using a 1031 exchange. This is an IRS procedure to eliminate the partial or total amount of capital gains taxes on the sale of private property. By trading up for another large investment, taxpayers’ capital gains taxes are deferrable if they are reinvesting the proceeds from a rental property sale into a new kind of asset.

As with most governmental dealings, 1031 rental property exchanges can be painstakingly detail-oriented with paperwork and deadlines to fill out and meet with precise requirements. Because of this, we strongly recommend that both new investors and experienced wealth managers use a 1031 exchange intermediary to make sure that everything is done correctly.

Rental Properties Like-Kind Properties

First, rental properties must go through the exchange for something that is “like-kind” for a valid 1031 exchange. Thankfully, the IRS views rental properties in the same what that they do most other private assets. For this reason, rental properties can be exchanged for

  • Commercial Buildings
  • Gas Stations
  • Shopping Malls
  • Apartments
  • Homes and Condos
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And more

1031 Exchange Rental Property – Timeline

Once a rental property is finally sold, then taxpayers have 180 days to purchase a new asset to qualify for a 1031 exchange. Before this, at least one property must be identified (but not necessarily purchased) within 45 days of the sale.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Rental Properties For

At the end of the day, there are a lot of different ways that you can reinvest the funds from a rental property sale. However, the United States is one of the few countries that permits taxpayers to invest in might rights.

By purchasing mineral rights, you can become the owners of the subsurface of a property. With this, you can enter into an oil and gas lease, which allows energy companies to extract and sell resources from your property. In doing so, mineral rights are useable to establish another great passive income stream, from monthly mineral royalty payments.

1031 Exchange Collectibles

How to 1031 Exchange Collectibles into Mineral Rights & Royalties

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Many people do not understand the lure of certain collectibles. There are a ton of different kinds of high price tag items. These items are sellable to enthusiasts around the world. From coins and watches to antiques and cars. Collectibles are sellable individually or as part of a larger collection of unique products. This is where 1031 Exchange Collectibles comes in as an investment.

If you sell a collector’s item for a significant amount of money, then taxes are applicable to the sale. For function or decorative, one-of-a-kind pieces of history. taxpayers can choose to utilize a 1031 exchange on the sale of a collectible. In doing so, capital gains taxes are deferrable so long as another property is purchasable in the collectible’s place.

Whenever it comes time to let go of your collectibles, we highly recommend looking into purchasing mineral rights through a 1031 exchange. With mineral rights, nothing is taking up space in your house and a mineral royalty check may be in the mail next month.

In this article, we will outline the steps to take in order to properly sell collectibles with a 1031 exchange. After this, we will make the case for mineral rights and royalties as one of the best possible reinvestments of your capital.

How to Sell Your Collectibles

To initiate a 1031 exchange, first, you must sell your collectible property. Obviously, there are a ton of different personal property items that can be considered a “collectible.” Under IRS law, the following can be considered a collectible in the event of a 1031 exchange:

  • Cars
  • Rugs
  • Antiques
  • Coins
  • Stamps
  • Metals
  • Gems
  • And much more

If there is a dedicated community around your collectible, the best way to sell your item is to connect with members of that community that may be interested in purchasing it. With this in mind, it has never been easier to interact with a global community on the internet. Depending on your collectible type, if it is valuable, there is probably a message board somewhere that would be interested in learning more.

Determining the Value of Your Collectibles

As we alluded to earlier, collectibles come in all shapes and sizes. Whereas some collectibles lose their value (sorry, Beanie Babies), others may appreciate in value over time. In some cases, collectibles will have dedicated websites or in-person events in which enthusiasts can freely buy or sell their collectible items.

There are many factors that influence the value of a collectible, including:

  • The approximate market value
  • Condition
  • Age and number of previous owners
  • Type of sale (i.e. to an individual or resale shop)
  • Ability to bundle with other collectibles in the same deal
  • Shipping or logistics
  • And more

If they are not functional, collectible markets can be very unpredictable. While many private owners simply collect for the love of the game, there usually comes a time to depart with assets that either take up space or are ripe for selling.

Taxes Paid on the Selling Collectibles

If you sell your collectible property for a significant amount of money, then you can also expect to pay a significant amount of money in taxes. Although the exact figure is largely dependent on your location and the size of your sale, the following are usually applied to high-ticket collectible sales:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

Experienced investors are well aware of capital gains taxes, whereas those selling their first collectible at a highly appreciated rate may not. Capital gains taxes are only applied if a significant amount of money is made on the sale, but they can also be avoided with a 1031 exchange.

Selling Collectibles with a 1031 Exchange

With a 1031 exchange, the IRS allows individuals to essentially “trade” collectibles for another property in order to avoid paying capital gains taxes. If the new property is of greater value than the collectible, then it is likely that a taxpayer will become eligible to defer 100% of the capital gains taxes that would otherwise have been applied.

Collectibles Like-Kind Properties

According to the tax code, collectibles must be replaced with “like-kind” property in order for a valid 1031 exchange to be accomplished. Although most collectors may not consider their items to be similar to homes or stores, the reality is that a 1031 exchange can be used to purchase practically any kind of personal property while deferring capital gains taxes.

The IRS considers the following “like-kind” properties:

  • Mineral Rights and Royalties
  • Farms
  • Homes
  • Condos
  • Apartments and apartment buildings
  • Stores and strips malls
  • And s much more.

Collectibles 1031 Exchange Timeline

The day you sell your collectible, your eligibility for a 1031 exchange begins. You must identify at least one property that is considerable as a replacement for your capital. You can accomplish it in the first 45 days. In total, taxpayers have just 180 days, or about 6 months, to purchase a new property in a 1031 exchange.

1031 Exchange Intermediaries for Selling Collectibles

There are deadlines to meet and paperwork to file. Many first-time and experienced investors choose to use a 1031 exchange intermediary when selling collectibles. In doing so, specialized industry professionals can help make sure everything goes to your plan. Helping to identify market-specific properties for the exchange that are useable to purchase.

Why Purchase Mineral Rights and Royalties?

Mineral rights and royalties are a strong part of many American portfolios, even though they are not readily available throughout the world. Here in the United States, it is impossible to lease your mineral rights to oil and gas companies in order to extract and profit from the natural resources in your property’s subsurface.

With monthly mineral royalty payments, investors can receive a passive income stream generated from a successful oil and gas lease. In today’s world, resource scarcity is as critical as ever, making mineral rights a sound investment for leasing or reselling in the future.

If you have further questions about 1031 Exchange collectibles, feel free to reach out to us. 

1031 Exchange Timberland

How to 1031 Exchange Timberland Into Mineral Rights & Royalties

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Most people’s first associations that come to mind are usually not related to the term’s original definition. This is when the word “timberland” is up today. To many, Timberland is just a footwear brand. To others, Timbaland is a famous American music producer. How about savvy investors and industry workers? For them, timberland is simply a private ownership patch of property to grow and harvest lumber. Let’s talk more about 1031 Exchange Timberland today.

Timberland is a great asset for producing massive amounts of wood above a property’s surface. This is useable as fuel, framework, and furniture. With this in mind, timberlands are commonly purchasable, can develop, and sellable for large profits.

How to maximize the sale of a timberland’s profits? Taxpayers can use a 1031 exchange to defer the capital gains taxes on the sale. How about in today’s resource-scarce world? We recommend investors turn below the surface of the earth for their next investment in mineral rights.

In this article, we will outline the steps to take in order to sell timberland and utilize a 1031 exchange to purchase mineral rights.

How to Sell Your Timberland

The first step to using a 1031 exchange is to sell your property. Selling timberland has been commonplace since before the foundation of the United States. So there are many long-standing systems in place for finding a buyer. Today’s timberlands are under the ownership of a myriad of different kinds of private investors and companies, with many organizations purchasing timberlands with a Real Estate Investment Trust.

Selling Timberlands is rarely done alone. It is usually most profitable with the help of a specialized intermediary. With this said, today’s technology makes it easier than ever to sell timberland in digital marketplaces that can attract buyers from anywhere in the world at any time.

Determining the Value of Your Timberland

One of the most commonly asked questions when selling timberland relates to determining its value. Timberland can be bought and sold on the open market. Moreover, sellers can usually see similar lands for sale and base their initial pricing on that figure.

Timberland is valued on a small set of criteria that includes:

  • Land size
  • Current status and conditions
  • Access and distribution channels
  • Additional income stream (i.e. mushrooms, nuts, etc.)
  • Current profitability

Of course, the price at which you sell your timberland can only be valuable at the price which an individual is willing to pay. Timberland is generally sold to private investors, but can also be sold to national and local land preservation organizations for a large one-time deal.

Taxes Paid on the Selling Timberland

If all of your hard work has paid off and you made it big selling your timberland, don’t start counting your money too soon. Nearly 40% of your sale may be taxed by local, state, and federal governments at a variety of rates. Depending on your location, timberland sales can be influenced by:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

As some first-time investors may not know, a 1031 exchange is an IRS-provided opportunity to defer some or all of the capital gains taxes paid on the sale of timberland.

Selling Timberland with a 1031 Exchange

With a 1031 exchange, the sale of timberland must be followed by the purchase of a similar property investment. If the new purchase is of equal or greater value then taxpayers are likely able to defer all of the capital gains taxes paid on the sale. To do so, investors must meet timelines and file the proper government paperwork. In most cases, taxpayers will use a 1031 exchange intermediary to ensure that everything goes as smoothly as possible.

Timberland Like-Kind Properties

According to the IRS code, timberland sales are eligible for a 1031 exchange with the subsequent purchase of most kinds of personal property. As both land and the grounds for business, timberland is one of the oldest but most interesting investments available in the United States.

In the event of a sale, a 1031 exchange can be used to purchase:

  • Farmland
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • Golf Courses
  • Collectibles
  • And more

Timberland 1031 Exchange Timeline

Although it may take a considerable amount of time on the market for a patch of timberland to sell, once it is sold, the clock starts on your opportunity to cash in on a 1031 exchange. Taxpayers have an exact 45 days after the sale to properly modify one eligible, like-kind property. After that, there is a total window of 180 days to purchase a new property that will be permissible for a valid 1031 exchange.

Why Purchase Mineral Rights and Royalties?

Like timberland, mineral rights are leaseable to a resource production company. Here, oil and gas companies can go about finding, extracting, and selling the natural resources that are found within your mineral rights designation.

In doing so, mineral royalty payments are signed to your name as a fixed percentage of the operation’s monthly revenue. As an owner of a subsurface asset, you are then in control of renewing a mineral rights lease or selling your mineral rights to another owner.

Here, the main difference is that timberland produces a renewable resource, whereas mineral rights do not. With this in mind, the window for investing in affordable mineral rights may be closing as the resources become more and more valuable. For this reason, mineral rights are a sound investment after selling your timberland.

Conclusion

At the end of the day, timberland is a strong investment. However, this means that developments and improvements can lead to large sales when the time is right. In order to get the most out of your timberland sale, a 1031 exchange can help defer costly capital gains taxes. When considering your new property, mineral rights are among the most similar and smartest reinvestments available today.

If you have further questions about the topic of 1031 Exchange Timberland, feel free to reach out to us here.

1031 exchange hotels

1031 Exchange Hotels and Motels [Ultimate Guide]

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Owning a hotel or a motel is one of the most interesting property types in a portfolio. This is from a business standpoint. A highly profitable daily rate can lead to enormous cash flow. On the other hand, uncontrollable influences may lead to a hotel’s or motel’s ultimate demise.

Have you decided that your hotel has had its last facelift? Do you have an interest in selling your property to invest your money elsewhere? A 1031 exchange can be utilized to eliminate capital gains tax when reinvesting in a new property. This is for both hotel and motel sales.

Mineral rights and royalties rarely have as much upkeep or attention required to benefit from the investment. This is unlike hotels and motels, In this article, we will outline the steps necessary to 1031 exchange hotels and motels into mineral rights and royalties.

How to Sell a Hotel or Motel

Of course, in order to 1031 exchange hotels and motels, you must first obviously sell it. Selling a hotel or motel may actually be considerably harder to sell than you may have anticipated.  Hotels and motels commonly sit on the open market for months and even years on end. This is common in communities with dwindling populations or tourism,

Today, most hotels and motels are sellable with the help of a commercial real estate agent. In some cases, the hotel’s property you can find out for the desirable land it occupies. Whereas the majority of new owners will likely try to operate the businesses or repurpose the structure.

Determining the Value of Your Hotels and Motels

Are you using the help of a professional third party or not? It’s always a good idea to know the approximate value of your hotel. This is when trying to sell it in the open market. As most hotels are sellable as operational entities, there are a considerable amount of factors that go into determining the value of a hotel or motel.

Some of these include:

  • Property Size
  • Building Size and Condition
  • Current Assets (i.e. beds, dressers, TVs, etc.)
  • Staff and Business Conditions
  • Branded chains vs. non-branded
  • Hotel vs. motel
  • Amount of Parking
  • Location
  • And more

It may be challenging to tally all of your assets into one magic number. Hotels and motels are sellable all around the country. With this in mind, it is not difficult to check online marketplaces to see the average hotel and motel prices in current market conditions.

Taxes Paid on the Selling Hotels and Motels

When piecing it all together, both hotels and motels can be sold for enormous amounts of capital. Since the dawn of time civilization, however, taxes have been taken out of large property sales, and hotels and motels are no exception.
In the United States, the following are paid on the sale of a hotel or motel:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Depreciation Recapture
  • Sales Taxes
  • Local Taxes
  • And More

So clearly, taxes will add up when selling a motel. Of course, capital gains taxes are deferrable if trading a hotel or motel with a 1031 exchange.

1031 Exchange Hotels and Motels

With a 1031 exchange, hotels and motels can be traded for properties of equal or greater value in order to fully avoid any capital gains tax imposed. Properties must be bought and sold by the same taxpayer and deadlines must be met as per IRS regulations.

With this in mind (and the idea of filling out detailed government paperwork), we highly recommend using a 1031 exchange intermediary to handle the tax process and/or assist with the property identification.

Hotels and Motels Like-Kind Properties

According to the IRS tax code, 1031 exchanges are only valid if the properties bought and sold are of “like-kind.” Essentially, what this means is that the assets in question must bear at least some kind of similarities. Thankfully, hotels and motels are considerable as both property and business entities. This allows them to be go through the exchange for a large number of like-kind properties.

This includes:

  • Apartments and apartment buildings
  • Single-family homes and condos
  • Trailer Parks
  • Farms
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And much more

Hotels and Motels 1031 Exchange Timeline

Once a hotel or motel is sold, taxpayers have 45 days to identify at least one property that can be considered for the 1031 exchange. This property does not necessarily need to be the one purchased, but an asset must be acquired within 180 days of the sale for a valid 1031 exchange. Up to 3 properties can be identified, regardless of their value.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Hotels and Motels For

Of all of the property assets that can be bought and sold in the world, mineral rights and royalties are one of the only ones that are unique to a few countries. Here in the United States, the acquisition of mineral rights can lead to extensive mineral royalty payments under the right oil and gas lease.

While a hotel or motel requires frequent decision-making for the continuous operation of the property, active mineral rights are a rarely-seen, yet a highly-desirable piece of many great investment portfolios.

Conclusion

Hotels and motels have been around forever and will likely continue to function as a large chunk of commercial real estate property throughout the world. With this in mind, hotels and motels are bought and sold constantly, sometimes out of desperation and other times out of pure profit.

Either way, when selling a motel or hotel, a 1031 exchange is great for quickly reinvesting your money with the least amount of capital losses in the process. In the United States, mineral rights and royalties should always be considerable as a great opportunity for return on investment.

1031 Exchange Hospital Equipment

How to 1031 Exchange Hospital Equipment into Mineral Rights & Royalties

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Hospital equipment can be very expensive, as the business of saving lives does not come cheap. Are you operating a hospital? How about an urgent care center? or clinic (or simply have some high-powered devices at home for your own needs), selling hospital equipment can actually lead to tremendous financial gain. Have you heard of a 1031 Exchange Hospital Equipment?

In fact, price tags on hospital equipment sales are often large enough to warrant a capital gains tax to be levied as a fixed percentage of the final dollar amount. In order to avoid paying these taxes, a 1031 exchange is useable to “trade” any piece (or multiple pieces) of medical equipment for a new property, capital gains tax-free.

We will outline the steps necessary to complete a successful 1031 exchange when selling hospital equipment. Beyond this, we will make the case for mineral rights and royalties as one of the strongest possible ways to reinvest your finances.

How to Sell Your Hospital Equipment

Just like in homes and apartment buildings, there are also websites and resources for selling hospital equipment such as medibid.com, medwow.com, and more. Here, medical equipment can be bought and sold in both large and small quantities, from hospital beds to individual syringes and tests.

In most cases, it is much easier to sell used hospital equipment to individual buyers looking to bring service into their own homes. This is large because hospitals are very particular about the equipment they source and use. With that said, underfunded hospitals around the world may be forced to purchase used equipment, so long as it is still functioning properly and safely.

Determining the Value of Your Hospital Equipment

With such a wide range of different kinds of hospital equipment, it is tough to give an overall estimate of how much any given property will sell for. Instead, hospital equipment is almost always priced by piece, with the final sale price as an accumulation of each part’s value. The easiest way to determine the value of your medical equipment is to check current market listings. While undervaluing your property may lead to a quicker sale, medical equipment is always going to be necessary and retains its value very well.

Taxes Paid on the Selling Hospital Equipment

Unless you are trading bandaids for cold hard cash, professional exchanges of hospital equipment for real income often lead to considerable taxation. In the United States, medical equipment sales are generally subject to:

  • Federal Income Taxes
  • State Income Taxes
  • Depreciation Recapture
  • Sales Taxes
  • Local Taxes
  • And More

With large hospital equipment sales, capital gains taxes may also be applied. This is applicable to those earning a considerable income from the transaction. If capital gains taxes are applied on the sale of your medical equipment, some or all of the cost can be avoided when making use of a 1031 exchange.

Selling Hospital Equipment with a 1031 Exchange

With a 1031 exchange, hospital equipment can be sold and “traded” for a new property in order to defer capital gains taxes. By reinvesting your money in a new asset, the IRS allows 1031 exchanges to be completed by the same taxpayer, saving considerable amounts of capital on taxes otherwise paid.

Hospital Equipment Like-Kind Properties

Under the IRS code, hospital equipment is considerable to be personal property. It serves a function for both businesses and individuals. With this wide spectrum of consideration in mind, hospital equipment is a considerable “like-kind” properties to a number of different assets.

While hospital equipment is not exchangeable for everything on the open market, the IRS considers the following “like-kind properties” eligible for a 1031 exchange:

  • Artwork
  • Collectibles
  • Leasing Portfolios
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And more

Beyond this, hospital equipment is exchangeable for single-family homes or apartments. Most private sellers are not selling hospital equipment at such high values. Now, it is fairly common for medical practices to upgrade equipment and sell their used devices for considerable amounts.

Hospital Equipment 1031 Exchange Timeline

Once the transaction is complete, taxpayers have 180 days to acquire a new asset. This is for a valid 1031 exchange to transpire. Remember that at least one property must be identifiable within 45 days of the sale of hospital equipment. This is inclusive in the six-month period in mind.

How do properly meet deadlines and file correct government paperwork? We highly recommend utilizing a 1031 exchange intermediary to make the process as smooth as possible.

Why Purchase Mineral Rights and Royalties?

They are little known to many investors. Mineral rights can be one of the most profitable assets in portfolios across the country. Here in the United States, mineral rights are purchasable to acquire a portion of or the entire property’s subsurface.

A leased oil and gas company handles all of the onsite operations from exploring to extracting. This starts with marketing and selling the natural resources of the property. A mineral rights owner will have a portion of each month’s sales. These come in the form of ongoing royalty payments.

Here, your mineral rights are not so much a physical asset, but rather a passive income stream in your portfolio. After selling hefty medical equipment, mineral rights and royalties are usually a welcome and smart investment.

Conclusion on 1031 Exchange Hospital Equipment

In conclusion, 1031 exchanges are great for deferring capital gains taxes after the sale of medical devices. Medical practices may rarely consider mineral rights as a working asset of their business. That’s why individual sellers have tremendous opportunities to reinvest their capital into mineral rights and royalties. In doing so, a new income stream is visible, and less medical equipment is taking up space. You now have more room in your home or facility.

Today, we highly recommend working with an intermediary when selling your medical equipment. This includes purchasing mineral rights in order to successfully maximize the benefits of a 1031 exchange.

If you have further questions, feel free to reach out to us here.

1031 Exchange Apartment

How to 1031 Exchange Apartments into Mineral Rights and Royalties

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Everyone remembers the day that they bought their apartment. However, not everyone is lucky enough to be able to remember the day they traded their apartment for something even more valuable. Introducing the 1031 Exchange Apartment opportunity.

In today’s world, the sale of an apartment anywhere (and on any floor) can lead to a huge influx of cash. As urbanization and property values skyrocket across the United States, the sales prices of apartments follow suit nationwide.

So if you’re ready to explore larger pastures, it just may be the right time to sell your apartment. However, what you may not know is that 1031 exchanges are available to help you keep more proceeds from your sale, by reinvesting the money in another property.

In this article, we will outline the steps in order to successfully sell an apartment using a 1031 exchange. After this, we will explore the idea of reinvesting into mineral rights and royalties.

How to Sell an Apartment

In many people’s experiences, selling an apartment is actually an incredibly easy process. Real estate agents nationwide are standing by and ready to show your property to a number of interested buyers, so most people usually choose to hire a professional. Occasionally, large apartment complexes may have an in=house team of managers who are ready and willing to help.

In other cases, selling an apartment without the help of a real estate agent is always possible, and growing in popularity. With linter listings becoming the new norm, smart investors are finding ways to keep as much of the pie from an apartment sale as possible.

Determining the Value of Your Apartment

Of course, to sell your apartment, you will need to determine its value. In a sense, the highest value of your apartment is simply the maximum price that a buyer is willing to pay for the property. In good market conditions, it is always important to over-value your apartment. However, if you are in an area with many other properties for sale, you may need to undervalue your apartment to find a quicker sale.

The total asking price for an apartment is determinable by:

  • The original listing price
  • Apartment age
  • Current market conditions (local and national)
  • Maintenance required
  • Upgrades or remodeling
  • Apartment square footage
  • Building and community amenities
  • Pet policy
  • Floor and access
  • And more

One great thing about apartments is that there are likely many units, just like your own, down the hall or in surrounding areas. With this in mind, it is usually not difficult to obtain recent property appraisals and transactions for apartments similar to yours.

Taxes Paid on the Sale of an Apartment

Now before you start counting your chickens before they hatch, it is important to remember that significant taxes are paid on the sale of an apartment in the United States. This is especially true if your property has appreciated in value considerably since the time you bought it. Across the US, the following are usually paid on the sale of an apartment.

  • Federal Income Taxes
  • Sales Taxes
  • Local Taxes
  • And More

In the eyes of the IRS, the total taxes paid when selling your own home is actually a bit different than other real estate transactions. If your apartment was your primary residence then capital gains taxes are only applied on sales of over $500,000.

Of course, as the cost of living in condensed cities increases on the coasts and throughout the country, more and more apartments are sold at over half of a million dollars. For these transactions, capital gains taxes are applied which can typically be 10’s of thousands of dollars.

Selling Apartments with a 1031 Exchange

With premium apartment sales, capital gains taxes are partially or completely eliminated by using a 1031 exchange. A 1031 exchange is an official IRS process that allows smart investors to essentially “trade” their old property for another investment. If the new purchase is of greater or equal value than the sold apartment, capital gains taxes are completely eliminated.

Apartments Like-Kind Properties

In a 1031 exchange, new property purchases must be of “like-kind” property in order to qualify for tax savings. Apartments are viewed just like most other physical properties and can be exchanged for:

  • Homes
  • Condos
  • Farms
  • Trailer Parks
  • Mineral Rights and Royalties
  • And more

Apartments 1031 Exchange Timeline

The day after your apartment is sold, the clock starts ticking on your eligibility for a 1031 exchange. In total, taxpayers have 180 days to replace an apartment with a new property in order to qualify for capital gains deferral. Before you kick your feet up for five months, it is important to note that one eligible property must be identified (but not necessarily purchased) within 45 days of the apartment sale.

Why Purchase Mineral Rights and Royalties?

For a lot of parent owners, mineral rights and royalties may be a foreign concept. They are not typically included in apartment deeds. Rather, like on many other kinds of property mineral rights are available to purchase. It is in order to claim the subsurface resources of a particular plot of land.

With active mineral rights, oil and gas companies lease this land to survey, extract and sell resources like oil, gas, coal, and more. By owning the mineral rights, you are then entitled to a fixed share percentage of each month’s sales, known as a mineral royalty payment.

Knowing this, it is very easy to establish a great passive income stream with the purchase of high-valued mineral rights. If this sounds like something of interest, we highly recommend speaking to a 1031 intermediary that specializes in the field.

Conclusion

At the end of the day, selling your apartment opens a lot more doors than just your former entranceway. By utilizing a 1031 exchange, former apartment owners can save a tremendous amount of money. For example, are on capital gains taxes that would have been otherwise applied.

Is finding a new roof over your head not your number one priority? Then an investment in mineral rights and royalties is a potentially great opportunity. It is a way to benefit from the sale of an apartment.

If you have further questions related to 1031 Exchange Apartments, feel free to reach out to us here.

1031 exchange gas stations

1031 Exchange Gas Stations [Ultimate Guide]

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For first-time sellers and experienced investors, gas stations can be purchased, improved, and sold for tremendous profit margins. There are more and more cars on the road every year. That is the reason why gas stations are a staple of the American road system. It is providing food and fuel to travelers on roads both large and small. Today, the sale of a gas station can be maximized by using a 1031 exchange. In trading for another property, capital gains taxes are deferrable and more of the proceeds from a gas station sale are useable for reinvestment. In this article, we will explain and outline the steps that need to be taken in order to 1031 exchange gas stations. With that, we will also make the case for mineral rights and royalties. They are one of the best possible ways to continue to benefit from the sale.

How to Sell A Gas Station

In order to 1031 exchange gas station, you must first obviously sell it. Selling gas is easy, but selling a gas station isn’t as so. Gas stations are a highly specialized kind of property unlike any other commercial real estate of its kind. Knowing this, the process of selling a gas station may be more laborious than you originally anticipated.

With that, gas stations are located practically everywhere across the country. It is as nearly every town in America is home to one or two. This familiarity makes the sale of a gas station more likely among investors looking to buy a property type that has stood the test of time.

For the most part, gas stations are sold with the help of a specialized, commercial real estate agent. This is most commonly true in big cities and towns. However, in highway communities across the country, a gas station may likely be one of the highest valued properties in the area.

Determining the Value of A Gas Station

Today, gas stations are typically sold in online listings or through word of mouth. Gas stations are sold on the open market and can only truly be valued by the highest purchasing bid. Although some abandoned facilities will go to auction, typically gas stations are sold after negotiations of a predetermined sales price.
As the sum of many different parts, the total value of a gas station can be determined by summing the following considerations:

  • Property size and condition
  • Number of buildings, size, and conditions
  • Number of filling stations
  • Bonus facilities (car wash, air pumps, etc.)
  • Branded affiliations (both for store and gas pumps)
  • Business records, profit and loss statements, etc.
  • Transferable employees
  • Current supply chain relationships
  • And more

So clearly, there are a ton of things to consider before putting a price on your property. If possible, locate the properties appraisal records, as well as the previous listing prices for other gas stations in the local vicinity.

Taxes Paid on the Selling Gas Stations

As both a business and a property, gas stations are often sold for significant amounts of money. Of course, for every dollar that a gas station is sold for, more taxes are applied to the sale by local and federal governments. When selling a gas station, the following are usually applied:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

1031 Exchange Gas Stations

Of course, savvy investors trying to pinch every penny from their sale are well aware that 1031 exchanging gas stations can partially or completely eliminate capital income taxes paid on the sale of a gas station. By “trading-up,” for a new property, the IRS allows for capital gains taxes to be avoided if the same taxpayer simply reinvests their money elsewhere.

Gas Station Like-Kind Properties

Of course, you can’t use a 1031 exchange to trade just anything for a gas station. Instead, the property must be considered to be “like-kind” in the eyes of the IRS. Thankfully, most physical assets qualify as similar enough to gas stations in order to qualify for a 1031 exchange.

For instance, the following can be considered like-kind properties:

  • Strip malls and shopping centers
  • Trailer parks
  • Hotels
  • Water and ditch rights
  • Mineral rights and royalties
  • Farms
  • Office buildings
  • And more

1031 Exchange Gas Station – Timeline

Gas stations can take a considerable amount of time to sell, so it is a good idea to consider what you might use a 1031 exchange to purchase even before you are headed to a large check. This is especially true because at least one property must be identified in the first 45 days after the sale of a gas station. Beyond that, taxpayers have just 180 days, or roughly 6 months to purchase a new property in a 1031 gas station exchange.

Failure to meet deadlines and file paperwork on time is typically not forgiven by the IRS. With this in mind, it is strongly recommended to work with a 1031 exchange intermediary when maximizing the reinvestment of your funds.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Gas Stations For

Mineral rights and royalties are highly profitable ventures that many American investors are still unaware of. The truth is, for the past 100 years, mineral rights owners have been leasing their subsurface property to oil and gas companies in exchange for sizable mineral royalty checks.

In a sense, selling a gas station and purchasing mineral rights is kind of like selling your house and buying a quarry that exports building materials. By going “back to the source,” an investment in mineral rights is a largely passive income stream that does not require the maintenance and upkeep as a gas station does.

Conclusion

In conclusion, gas stations are highly valuable, which is why it is important to maximize the proceeds when selling one on the open market. By utilizing a 1031 gas station exchange it is possible to defer tens of thousands of dollars in capital gains taxes that would have been otherwise paid. Although the choice is yours to reinvest in any kind of property, mineral rights and royalties are an easy way to stay profiting in the oil industry with significantly less time and effort.

1031 Exchange Convenient Stores

How to 1031 Exchange Convenient Stores into Mineral Rights and Royalties

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In American cities large and small, convenience stores are an essential part of the consumer ecosystem. With the right location, a convenience store can be a highly profitable business whether as the landlord or general manager. With that said, favorable real estate and existing customer flow can make convenient stores an incredibly hot commodity. Are you a first-time investor and seasoned property owner? The proceeds of the sale of a convenience store are stretchable by using a 1031 Exchange Convenient Stores

With a 1031 exchange, convenience stores are exchangeable for another property. This is to avoid paying any capital gains tax from the original sale. In today’s energy market, there are few better ways to reinvest in the sale of a convenience store.

In this article, we will detail the steps to take when selling a convenience store. This is through using a 1031 exchange, and purchasing profitable mineral rights and royalties.

How to Sell A Convenience Store

First things first, let’s sell your convenience store. Convenience stores are sellable and tradeable on the open market just like any other kind of property. With this in mind, convenience stores are sellable by using local ads, online listings, and real estate brokers.

Determining the Value of Your Convenience Store

The great thing about convenience stores is that they can be found all over the world. In the United States, it is extremely easy to locate property records and appraisal values of convenience stores in and around most areas of the country. With this in mind, determining the value of your convenience store is best represented by comparing it to similar properties on the market today.

The total value of a convenience store can be determined by factoring in the following considerations:

  • Property Location (Foot or Car Traffic)
  • Property Size
  • Number of Parking Spaces
  • Existing Structures
  • Number of Gasoline Pumps
  • Current Operations, Partnerships, and Supply Chains
  • Franchise Agreements
  • And more

When it comes to convenience, location is almost everything. Beyond that, the value of a convenience store is largely dependent on the conditions of the current facilities and business operations.

Taxes Paid on the Sale of a Convenience Store

Whenever you put a price tag on your convenience store, don’t count your chickens before they hatch. It is important to remember that a considerable amount of taxes are paid on the sale of a convenience store. This includes:

  • Capital Gains Tax
  • Depreciation Recapture
  • Federal Income Tax
  • Sales Tax
  • Local Taxes
  • And More

With these fees factored in, you can expect to pay as much as 40% of the sale price in total taxes. However, as we mentioned before, capital gains taxes can be partially or completely avoided by utilizing a 1031 exchange.

Selling Your Convenience Store with a 1031 Exchange

With a 1031 exchange, the purchase of a like-kind property makes it possible to “trade” a convenience store and avoid capital gains taxes. As there are many strict rules and timelines to meet, it is recommendable to utilize a 1031 intermediary when initiating an exchange.

Like-Kind Properties for the Sale of a Convenience Store in a 1031 Exchange

Under the all-knowing power of the Internal Revenue Service (IRS), most properties can be considered similar enough to a convenience store that a 1031 exchange can be used. For example, capital gains taxes will be avoided if you use a 1031 exchange to purchase

  • Mineral Rights and Royalties
  • Land
  • Water and Ditch Rights
  • Homes
  • Apartment Buildings
  • Farms
  • And more.

Timeline for Using a 1031 Exchange after Selling a Convenience Store

After you sell a convenience store, you have 45 days to identify at least one property considerable as a 1031 exchange. Although you do not necessarily have to purchase the first property, only 3 total properties are identifiable regardless of their value. Purchase must be made within 180 days of the sale in order for a 1031 exchange to be valid.

How to Purchase Mineral Rights and Royalties

More than any other like-kind property, we strongly recommend looking into the purchase of mineral rights and royalties after the sale of a convenience store. If you are unfamiliar, mineral rights are the property rights of a land’s subsurface, which entitles owners to lease or sell the value resources found within the earth’s crust.

Why are mineral rights a good investment?

Active mineral rights allow for property owners to receive monthly mineral royalty checks as a fixed percentage of the sale of oil gas or other natural resources. Even if a property is not currently not under drilling, mineral rights retain their value if the property has the potential to undergo excavation in the future.

How to Maximize Your 1031 Exchange with Mineral Rights

If you’re new to mineral rights and royalties, we recommend that you speak with a 1031 intermediary that specializes in the subject. Whereas mineral rights transactions are not a requirement to be a public record, determining the current and potential future value of mineral rights can be difficult for first-time investors.

Conclusion on 1031 Exchange Convenient Stores

At the end of the day, convenience store sales can lead to huge lump sums of cash. The best way to retain, reinvest, and profit from that cash is by using the 1031 exchange to avoid capital gains taxes.

Mineral rights and royalties are the perfect, passive reinvestment for former convenience store owners. With the right property and oil and gas lease, owning the parietal or total mineral rights of a property can lead to a steady stream of revenue in the form of mineral royalties.

For more information on the timelines, laws, and process of filing a 1031 exchange, feel free to read our full list of rules and regulations.

Also if you have further questions about 1031 Exchange Convenient Stores, feel free to reach out to us here.

How long Do You have to Hold a 1031 Exchange Property

How to 1031 Exchange Land for Mineral Rights

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The sky’s the limit when you have land. With the proper zoning, construction team, and dream, anything can be accomplished when you pick the right property. With this in mind, the land is a hot commodity all across the country. Are you planning to develop the land? Attractive lots are sure to pique the interest of buyers with dreams of their own. This is of the best ways to maximize the return on investment. Usually after selling land is to use a 1031 exchange. Today, exchanges can be used to purchase highly profitable mineral rights. This can lead to a steady stream of mineral royalties. In this article, we will explain all of the steps necessary on how long do you have to hold a 1031 exchange property and to 1031 exchange land for mineral rights.

How to Sell Land

This may come as a surprise, but selling land is actually quite a bit different than selling a home. Houses are sold with the land beneath them. With that, the market for empty lots is a lot different than traditional real estate.

More often than not, the sale of land takes considerably longer than the sale of homes, buildings, and other kinds of real estate. With that said, landowners are allowed to sell their land on the open market, using any and every sales and marketing technique that they choose. Most commonly land sales are made through:

  • Yard Signs
  • Online Listings
  • Speciality Realtors
  • Word of Mouth
  • And more

Determining the Value of Your Land

The first step to selling your land is putting a price on it. Unless you are “pricing to sell,” it is a critical mistake to undersell the value of your land. More often than not, property prices will rise in areas with sustained development.

The value of a lot of lands is determined by:

  • The Size (Acreage)
  • The Location
  • Accessibility
  • Existing Structures
  • Zoning Laws and Requirements
  • Property Taxes
  • And More

Thankfully, most newly sold or developed land is usually neighbored by similar plots. In your city and across the country, it is very easy to check online listings in order to see the approximate value of similar properties. Finding an existing plot for sale that has the same features as your land is a good way to quickly see a reasonable value to price your property.

Taxes Paid on the Sale of a Land

No matter how much you sell your land for, there will still be at least some taxes taken from the sale and given to local and federal governments. Although it varies greatly between areas of the country, most people pay the following taxes when selling a piece of land:

  • Ordinary Federal Income Tax
  • Capital Gains Tax
  • Sales Tax
  • Local Taxes
  • And More

Here, the difference between land and a home is critical. Whereas selling your home will likely exempt you from paying capital gains tax, this is only because a special rule is made for selling the property that you live on. In the case of land or a vacant lot, more often than not, a capital gains tax is imposed.

How to 1031 Exchange Land and How long Do You have to Hold a 1031 exchange Property

With a 1031 land exchange, paying some or all of the capital gains tax imposed on the sale of a lot of land can be completely avoided. A 1031 exchange is an IRS-designated investment strategy in which selling property then quickly buying a similar property allows investors to be exempt from paying capital gains taxes.

Like-Kind Properties for 1031 Land Exchange

A 1031 exchange gets its name from “exchanging” the sale of a property for another one of “like-kind.” Under the laws imposed by the IRS, land is a fairly easy to define property, which shares the features and investment potential with many other like-kind purchases.

Like-kind properties for 1031 land exchange include:

  • Mineral Rights
  • Homes and Apartments
  • Malls and Strip Centers
  • Trailer Parks
  • Water and Ditch Rights
  • And More

1031 Land Exchange – Timeline

Even before you sell your land, you may want to begin thinking about the like-kind properties that you would like to purchase. Because the sale of land can take a considerable amount of time, knowing the direction you would like to take with your investment is extremely important once the land is sold and 1031 timelines must be met.

To start, the IRS requires that at least one like-kind property must be identified within 45 days of the sale of a piece of land. After that, the new property must be purchased within 180 days of the sale in order to qualify for a valid 1031 land exchange.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

Using an Intermediary to 1031 Exchange Land

A 1031 exchange intermediary is strongly recommended for both first time and experienced investors when selling land. Utilizing the resources and knowledge of a professional will not only help 1031 timelines be met, but will also likely maximize your investment.

How to Purchase Mineral Rights and Royalties?

With mineral rights and royalties, former landowners are able to reinvest their money into the subsurface rights of a different property. In doing so, oil and gas companies leasing the land care are required to send a mineral royalty check as a fixed percentage of the monthly sale of oil, gas, or other natural resources from the property.

Mineral rights may be intimidating to first-time buyers, as the property may never even be visited by the investor themselves. Speaking to a professional about mineral rights and royalties is strongly advised in order to best explore your options.

Why 1031 Exchange Land for Mineral Rights?

The sale of land can be best reinvested by 1031 land exchange for mineral rights to avoid capital gains taxes. Even if it takes a few years to sell your land, quickly identifying mineral rights and royalties and purchasing them with a 1031 exchange can be a highly profitable venture.

1031 exchange building

Why & How to 1031 Exchange Buildings

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Commercial buildings come in all shapes and sizes. Have you seen towering downtown offices? How about fast-food restaurants? Commercial buildings can take up the majority of any town’s business center.

In most cases, commercial buildings are leased to paying tenants. However, when things go awry (or a global pandemic hits), many building owners find themself tired of finding renters. This is where they start looking to sell their property.

Today, buildings can be sold at a tremendous value, which usually means considerable taxes will be paid on the sale. Thankfully, some or all of the capital gains taxes can be deferred by using a 1031 exchange.

In this article, we will outline the steps it takes to 1031 exchange buildings. After exploring potential reinvestment options, we will make the case for mineral rights and royalties. This can bring tremendous value to an investment portfolio.

How to Sell A Commercial Building

In order to 1031 exchange building, you must first obviously sell it. Think back to how you purchased your property. Chances are that things haven’t changed in the way this step of the process is done. Commercial building sales have been commonplace for over a century, so there are many systems in place to help you.

Many real estate websites have specifically designated commercial building sections. This includes for independent buyers to pursue and purchase. But more often than not, most of today’s buyers and sellers will use a commercial real estate agent. Do you know what can make the process of selling a building easy and painless? Having someone who knows the market, has connections, and understands your property.

Determining the Value of A Building

Whether you are going out on your own or just checking to see the validity of your broker’s claim, you must first determine the value of your building. This is before putting it on the open market. Commercial buildings have a ton of factors that determine their value, and therefore have a wide range of price points across the country.

All in all, the value of a building is largely determined by:

  • Building Size (Sq footage, number of floors, etc)
  • Building Condition (need for repairs)
  • Special Features (energy efficiency, gardens, etc.)
  • Current Tenant Status (single, multi, none, etc.)
  • Property Size
  • District and property taxes
  • And more

In most cases, it is fairly easy to source the publicly available records of your commercial building in order to double-check the value you purchased it before, as well as its history. To get an idea of market trends, it is also commonplace for building owners to check the value of similar-sized buildings in the area. Although they are similar markets, the value of commercial real estate may not be impacted by local residential rates.

Taxes Paid on the Selling Buildings

Once a building is sold, a considerable amount of taxes are paid to local and federal governments. The total amount of taxes applied to a building sale is largely dependent on the dollar amount and property location and zoning. Around the country, the following are generally paid on building sales:

  • Capital Gains Taxes
  • Depreciation Recapture Taxes
  • Federal Income Taxes
  • Sales Taxes
  • Local Taxes
  • And More

As the numbers add up, most investors try to find ways in order to limit the amount of tax paid and maximize the return on the sale. As we mentioned above, a 1031 exchange is one of the best ways to do so, as it can be used to narrowly avoid hefty capital gains taxes.

1031 Exchange Buildings

Whenever you sell your building, the clock begins ticking on your eligibility for a 1031 exchange. As it is called an “exchange,” IRS tax code 1031 tells us that capital gains taxes can be deferred if the property is replaced with another, similar property.

In order to do so, paperwork must be filed and deadlines must be met. As IRS processes can be laborious and painstaking, it is strongly recommended that investors work with a 1031 exchange intermediary to make sure everything goes as planned.

Buildings Like-Kind Properties

As commercial buildings are one of the most common types of property in the United States, they can be sold and exchanged for a large variety of new purchases. The following can be purchased with a 1031 exchange after selling a building:

  • Single and Multi-Family Homes
  • Trailer Parks
  • Malls and Strip-Malls
  • Farms & Land
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And Many More

1031 Exchange Buildings – Timeline

To successfully complete a 1031 building exchange, new like-kind properties must be purchased within 180s of the sale of a building. Don’t wait until it is too late, however, because at least one reasonable property must be identified within 45 days. Commercial buildings can spend a lot of time on the market, so research can be done on reinvestments even before it is officially sold.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Buildings For

Mineral rights and royalties are quite different from buildings, however, investors in the United States have been profiting off of subsurface rights for over a century. Mineral rights can be leased to oil and gas companies, just as commercial buildings can be leased to tenants. The key difference here is that every month an oil and gas company successfully extracts and sells natural resources, you are entitled to a fixed percentage of the profits as the mineral rights owner. With this in mind, a passive income stream is born that rarely requires your upkeep.

Conclusion

Ultimately, commercial buildings are a sound investment as society will always have the need for office space, dining capacity, and so much more. As portfolios diversify and buildings are sold for tremendous amounts of money, mineral rights and royalties are among the best possible reinvestments in today’s market.