Posted by CarolFL on February 10, 2000 at 07:14:07:
Guess I get to call our buddies as API.
thanks David.
carol
1031 exchanges … do I have to hold it for a certain period of time? - Posted by CarolFL
Posted by CarolFL on February 08, 2000 at 17:03:13:
We took the proceeds from a property sold last fall and 1031’d them into two properties. One we are content to hold for cash flow. The other we are considering now selling.
Before I chase down the good folks who handled the deal, can someone tell me if there is any period of time we must / should hold one of these properties before selling and doing another 1031?
Can you tell this was our first?
Carol and Dennis
Thanks all … - Posted by CarolFL
Posted by CarolFL on February 09, 2000 at 07:41:15:
for your responses. Just what I needed to know and it saved me a call to API (who are nice folks, anyway).
Bud, I should have thought to email you - I knew you had some 1031’s cooking!
Gracias,
Carol
Re: 1031 exchanges … do I have to hold it for a certain period of time? - Posted by Bud Branstetter
Posted by Bud Branstetter on February 09, 2000 at 24:45:55:
It is reccomended that you hold the new property for two years before you sell it. There is no hard and fast rule. What about a L/O to make it another year. Refi or sell a note to get some of the cash back. Or put up as collateral for a credit line loan. You can take back a note to equalize and not have mortgage reduction on a 1031. That note can then be sold to get cash to the person that wants it.
Re: 1031 exchanges … do I have to hold it for a certain period of time? - Posted by Troy M
Posted by Troy M on February 08, 2000 at 21:23:56:
Hi Carol,
I just went to a presentation by ‘Asset Preservation, Inc.’ a few weeks ago. They specialize in 1031 exchanges and their answer was they recommend two years, but they have done them for clients after just 4 months. The key is showing ‘intent’ and that may mean holding title differently. Here’s a quote from their handbook:
"Propert held for resale is not exchangeable, as it was not acquired with intent that it would be ‘held for investment’. This is otherwise known as ‘inventory’, ‘dealer property’ etc. Please note there is no ‘minimum holding period’ which validates ‘held for investment’. The burden of proof lies on the taxpayer and is supported by intent, facts and circumstances which are unique to each exchange. It is, however, practical to use the two year test as a conservative measure.’
He also recommended to me that I hold title differently, such as in an LLC (since my normal business is structured as a c corp).
Hope this helps,
Troy M
Re: 1031 exchanges … do I have to hold it for a certain period of time? - Posted by Chris
Posted by Chris on February 08, 2000 at 18:27:52:
Hi Carol-
This may help. Where in FL do you live(city/county)?
There may be an exchange group near you.
To complete an Exchange, there are certain requirements including:
Identifying a replacement property within 45 days from closing the sale of the relinquished property.
Completing the acquisition of the replacement property by the earlier of the following dates (a) 180 days after the close of the sale or (b) the date the tax return is due for the taxable year of the sale.
There can not be a constructive receipt of the funds from the sale of the relinquished property. This necessitates the usage of a Qualified Intermediary to hold the funds.
-Hope this helps, Chris
that’s all done… - Posted by CarolFL
Posted by CarolFL on February 08, 2000 at 19:08:31:
and the proceeds from the relinquished property went into two new ones. My question now is, how quickly may I turn one of those two…
Appreciate your interest. I will get in touch with the Qualified Intermediary (API - who was great, by the way) tomorrow.
Oh - we are in Polk Co., FL.
Carol
I have a question - Posted by David Alexander
Posted by David Alexander on February 09, 2000 at 12:48:27:
Carol, I know very little about these exchanges so I’m probably asking a dumb question, but then again I’m not to proud to learn, 
Since you exchanged into two properties you dont have to exhchange those at the same time? If not then that would seem like the intent to hold right there that your looking for. Since you exchanged one of them with the right opportunity, and the other your still holding.
Maybe my thinking is wrong, just trying to wrap my brain around it.
David Alexander