A 1031 exchange is an excellent option for Boston condo sellers looking to cash in on the Boston condo market. You can defer paying big capital gains taxes, move up to a bigger and better investment property, and build your wealth in the process.

The Internal Revenue Code Section 1031 allows Boston condo investors to reinvest proceeds from the sale of one Boston property into another similar property of equal ot greater value, while deferring capital gains that would otherwise be due on April 15th.

Here are the four simple guidelines to review:

1. The properties involved must be held for “productive use in trade, business or investment” and must be like-kind. You can sell your  Beacon Hill rental condo, and reinvest the proceeds another Beacon Hill luxury property . But you can’t sell your rental property to another Beacon Hill condo to live in. It must be another rental property.

2. You have to complete the exchange in 180 days. The timeline begins when you close escrow on your “relinquished” property. There are no exceptions to this timeline.

3. You must identify your next property purchase within 45 days. After you close escrow on your relinquished property, you have 45 days to identify your replacement property. You have to identify all properties in writing, with a clear description. And there are two IRS rules for identifying replacement property. The first is the Three Property Rule, which allows for identification of any three properties, anywhere in the United States. The second is the 200% Rule, which is an option for identifying more than three properties. With this rule, you can identify four or more properties, but their combined value can’t exceed 200% of the property sold.

4. You must meet two requirements to defer 100% of the capital gains tax liability. First, you have to reinvest all the cash that was generated from the sale of your relinquished property. Secondly, the new property must be equal or greater in value to the property sold. You can’t use part of the money, or transfer any or all of the money into your own bank account. Once you touch it, you knock out the ability to do the exchange.

For more information call Robert Veek at 617-420-1401

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Updated: January 2018

Author Profile

John Ford
John Ford
EXPERIENCE

Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs



In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.



HISTORY

For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.

AREAS COVERED

Back Bay

Beacon Hill

Charles River Park

Downtown/Midtown

North End

South End

Seaport District

South Boston

Waterfront

Brookline

Surrounding Communities of Boston
Contact
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.




John Ford
Ford Realty Inc
137 Charles Street
Boston, Ma 02114

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