Description

In this informative video, Jeremy Cyrier from MANSARD sits down with 1031 exchange expert Patty Flowers to discuss the ins and outs of using 1031 exchanges for retirement planning. Jeremy introduces Patty as his go-to expert for all things related to 1031 exchanges and explains that they wanted to address a common question they receive: how to retire from real estate investments without paying hefty taxes. Patty explains that a 1031 exchange is an estate planning tool that allows investors to defer up to 100% of taxes when selling a property. The goal is to reinvest the proceeds into equal or greater value properties. She discusses various scenarios where investors might buy single tenant triple net lease properties for income and also consider purchasing a primary residence for retirement using a 1031 exchange. The conversation delves into the specific requirements and regulations surrounding the use of a 1031 exchange for setting up a primary residence. Patty explains that a residential rental property can qualify as a like-kind exchange, but it must be rented for at least two calendar years. She details the IRS regulations regarding personal use and rental periods during the first two years of ownership. Jeremy and Patty discuss the transition from investment use to personal use, commonly known as converting the property. They clarify that no taxable event occurs when converting the property into a primary residence. However, they note that reporting changes are required, such as the cessation of rental income and depreciation on tax returns. Furthermore, Patty highlights the proration of the primary residence exemption when selling a property that was previously a 1031 exchange. The IRS regulations dictate that the exclusion will be prorated based on the total period of ownership and the time spent renting versus personal use. The video also explores the option of reinvesting the property back into the rental market after living in it as a primary residence, allowing for potential future exchanges. Jeremy and Patty touch on the importance of estate planning and the stepped-up basis benefit, which can eliminate capital gains tax liability for heirs when the property is passed down upon the owner's death. Timestamps: 00:05 - Introduction 01:06 - Exploring the 1031 exchange for retirement planning 02:45 - Requirements for 1031 exchanges and mixing property types 04:42 - Regulations for using a 1031 exchange to set up a primary residence 06:35 - Converting the property to a primary residence and tax implications 08:26 - Proration of the primary residence exemption and taxable gains 09:47 - Using a 1031 exchange to save on taxes and the stepped-up basis benefit 11:59 - Exploring the estate planning benefits of a 1031 exchange 13:37 - Conclusion and contact information Patricia A. Flowers, CES® Vice President Toll-Free: (877) 781-1031 Cell: (617) 899-4718 Direct: (617) 423-1031 Toll-Free Fax: (888) 310-1868 Email: patricia.flowers@ipx1031.com https://www.ipx1031.com/locations/nam... ~~~~ Subscribe to MANSARD’s YouTube Channel: / @commercialreales... ~~~~ 6 Reasons Why People Are Selling in Today's Market: https://masscommercialproperties.com/... ~~~~ Connect with MANSARD on LinkedIn: https://www.linkedin.com/company/mans... ~~~~ Follow MANSARD on Facebook: https://www.facebook.com/mansardcre/ ~~~~ Follow MANSARD on Instagram: https://www.instagram.com/mansardcomm... ~~~~ Follow MANSARD on Twitter: https://twitter.com/mansardcre