1031 Coordinators of New York, LLC
Nationwide Qualified
1031 Intermediary
Specializing in and facilitating Section 1031 Like-kind Exchanges
Providing personalized service, security and guidance as an Internal Revenue Code 1031 Exchange Intermediary since 2002
Nationwide Qualified 1031 Intermediary
since 2002
What is a 1031 Exchange? The basics...
The Internal Revenue Code § 1031 permits an owner of real property that is held for business or investment purposes to defer the payment of capital gains tax (as well as taxes due on recapture of depreciation) in the exchange of real property for “like-kind” business or investment real property provided that certain rules are followed and specific requirements are satisfied. Several types of exchanges exist and the rules for a successful exchange vary depending upon the unique circumstances of each transaction.
Straightforward Standard 'Deferred' Exchange
A Standard 'Deferred' § 1031 Exchange is suited for all individuals or entities that are selling business or investment property (cooperatives, single or multi family houses, apartment buildings, vacant land or commercial premises), will be making a moderate or large profit on the sale and will be reinvesting most or all of the proceeds from the sale in new business or investment property. By using 1031 Coordinators of New York to properly structure the transaction and abiding by the time constraints and other technical obligations of § 1031 of the IRS Tax Code, the entire tax due on the profit from the sale as well as the income tax due on the recapture of depreciation, if any, can be deferred and/or eliminated.
To defer payment of the tax the following general rules must be followed:
a) 1031 Coordinators of New York, LLC must be assigned into the transaction before closing on the property being relinquished (sold). Prior to or shortly after a contract is signed, this office should be provided a copy of the Contract of Sale so the proper Rider and Assignment can be prepared;
b) The Replacement Property must be of equal or greater value as the Relinquished Property;
c) The funds from the sale must never be put into the Exchanger's name or its attorney's escrow account; Improperly drawn checks cannot even be endorsed over to 1031 Coordinators, as this has been determined, in transactions in which 1031 Coordinators was not the exchange company, to be constructive receipt thus eliminating the availability of a tax deferred exchange;
d) All "equity" from the sale must be reinvested;
e) The same or greater debt as there was on the Relinquished Property must be obtained on the Replacement Property;
f) The Replacement Property being purchased must be "identified" on a form to be provided by 1031 Coordinators within 45 days of the date of the sale;
g) The Replacement Property must be purchased within 180 days of the date of the sale, or by the date the Exchanger's tax return is due if sooner.
Reverse Exchange
A Reverse 1031 Exchange is an exchange in which a Replacement Property is purchased prior to the Relinquished Property being sold.
This type of exchange requires 1031 Coordinators to set up a new entity
(an LLC) to take title to the Replacement Property until the Relinquished Property is sold. By properly structuring the transaction the taxpayer will be able to defer or eliminate payment of income tax on the profit it will be making from the sale of the property it is relinquishing.
At the time of the closing of the Relinquished Property, 1031 Coordinators will transfer ownership in the newly formed entity (LLC) to the Exchanger or transfer title to the Exchanger. The new LLC cannot hold title for more than 180 days.
Build-To-Suit / Construction / Improvement Exchange
A Build-To-Suit (Improvement or Construction) Exchange is an exchange in which improvements are made to Replacement Property before it is conveyed to the Exchanger. In this situation, an Exchange Accommodation Titleholder (EAT), an entity set up by 1031 Coordinators, is created to assist with the transaction.
There are two basic types of Build-To-Suit Exchanges in which an EAT is necessary:
In a Deferred Build-To-Suit Exchange, the EAT acquires the Replacement Property, after the sale of the Relinquished Property, and improves the Replacement Property by using funds in the Exchange account during the 180 day period prior to which it must be owned outright by the Exchanger. The EAT enters into a construction contract with a builder/contractor to perform improvements on the already purchased premises, appointing the Exchanger as the construction manager. The Exchange Agreement will require that the EAT deed the Replacement Property to the Exchanger by the 180th day.
In the Reverse Build-To-Suit Exchange, title is transferred to the EAT and improvements are made on the Replacement Property, prior to the sale of the Relinquished Property, using funds loaned to the EAT by the Exchanger. Similar to the Deferred Exchange, the EAT will enter into a construction contract with a builder/contractor to effect improvements and appoints the Exchanger as the construction manager.
The Build-To-Suit Exchange allows an Exchanger to use “tax free” funds to build or improve Replacement Property.
Simultaneous Exchange
A Simultaneous Exchange is an exchange in which the sale of the Relinquished Property and the purchase of the Replacement Property take place on the same day or occur within approximately 72 hours.
For this type of exchange, 1031 Coordinators will prepare the necessary Exchange documents, directives and authorizations to ensure a seamless process with no delays in checks “clearing” the bank so that funds are immediately available for use in the simultaneous purchase of the Replacement Property.
OUR MISSION
The goal of 1031 Coordinators is to provide excellent and personalized service to our clients. All exchanges are handled individually and our firm is available to answer all questions and ensure clients are educated and comfortable throughout all aspects of the exchange process.
Internal Revenue Code § 1031 contains numerous rules that must be complied with when completing an exchange transaction. 1031 Coordinators will review the contract to ensure that the required language is contained therein, prepare the appropriate exchange documentation for the specific type of exchange being conducted and thereafter advise the exchanger of the time constraints and other technical regulations set forth in § 1031 of the IRS Tax Code in order to protect our client’s interest.
The security and protection of our client’s funds is our highest priority. As such, all funds are held in segregated sub-escrow accounts in the name of the exchanger and under its taxpayer identification number.
PERSONALIZED SERVICE AND EXPERTISE
DAVID W. GRABER
OWNER/MANAGER
David W. Graber is the owner and founder of 1031 Coordinators of New York, LLC. He has extensive experience and expertise regarding the intricacies of exchange transactions that he has acquired by serving as a Qualified Intermediary for 1031 exchanges throughout the country since 1990. Mr. Graber is also a practicing attorney in New York with over 30 years of experience in all aspects of real estate litigation, closings, 1031 exchanges and landlord/tenant litigation.
CONTACT
1031 Coordinators of New York
OUR ADDRESS
55 Watermill Lane Suite 100
Great Neck, NY 11021
Email: David@1031CONY.com
Tel: 516-292-4385
888-990-1031
For any general inquiries, please fill in the following contact form:
