Whether you’re aiming to increase value or diversify into a new asset class, our experienced professionals have extensive expertise in all commercial property types and will support you through each phase of your 1031 exchange process.
At Kidder Mathews, through our partnership with a national, third-party qualified intermediary, we offer expert guidance to investors navigating the complexities of 1031 exchanges, ensuring you meet all IRS requirements while maximizing tax savings and investment potential. Our team helps streamline every aspect of the process — from selling your property to reinvesting in like-kind assets — so you can focus on growing your portfolio.
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Comprehensive Exchange Solutions We understand the intricacies of 1031 exchanges and through our partnership with a national, third-party qualified intermediary, are equipped to assist with a wide range of transaction types, including forward, reverse, and improvement exchanges. No matter the complexity, we have the knowledge and resources to handle your specific needs, whether it’s high-volume transactions, multi-state exchanges, or properties held in trusts or LLCs.
Secure Fund Management Our partnership with a national, third-party qualified intermediary ensures your exchange funds are held securely in segregated accounts at leading financial institutions. This allows you to execute your transaction with confidence, knowing that your funds are protected throughout the process.
Market Expertise With deep insight into local and national markets, our brokerage experts work closely with you to identify ideal opportunities for reinvestment. We prioritize your goals, helping you find the perfect replacement property efficiently and strategically.
Streamlined Process Our national, third-party qualified intermediary provides industry-leading tools and technology, ensuring that every detail of your transaction is organized and managed with precision, keeping you on track and minimizing any potential delays or disruptions.
Benefits of Kidder Mathews 1031 Exchange Services
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What is a 1031 exchange?
A 1031 exchange is a tax deferral tool that allows the seller of qualifying real property to defer taxes on their transaction including federal capital gains, state, depreciation recapture, and net investment income tax so long as the proceeds from the sale are used to acquire other qualifying, real property. Multiple requirements must be adhered to for a valid 1031 exchange.
What is the role of a qualified intermediary?
A qualified intermediary is a third-party that ensures compliance with IRC 1031 for a valid 1031 exchange. This includes the following:
- Acquires relinquished property from the exchanger and transfers it to the buyer
- Ensures exchanger is not in actual or constructive receipt of any of the funds from the sale of the relinquished property
- Acquires replacement property from the seller and transfers it to the exchanger
- Structures the exchange per IRC 1031
- Prepares all related documentation
- Monitors and instructs the exchanger of action to ensure maintained compliance throughout the exchange
What type of property is eligible?
Nearly all real property held for business or investment purposes is considered to be “like-kind” to all other real property. The following types of property are often exchanged with taxes deferred:
- Office buildings
- Industrial buildings
- Warehouse buildings
- Apartment buildings
- Retail/shopping centers
- Farm and ranch land
- Vacant land held for investment
- Hotels and motels
- Cell tower sites and easements
1031 Exchange Insights
Who manages the 1031 exchange process?
Since 1991, IRC § 1031 has required the use of an impartial third party to hold the proceeds from the Relinquished Property sale until the close on the Replacement Property. This third party is known as a qualified intermediary.
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What is a 1031 exchange?
A 1031 exchange, also known as a like-kind exchange or tax deferred exchange, is where real property that is “held for productive use in a trade or business or investment” is sold and the proceeds from the sale are reinvested into a like-kind property intended for business or investment use, allowing the taxpayer, or seller, to defer the capital gains tax and depreciation recapture on the transaction.
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What are the requirements and rules for a 1031 exchange?
All 1031 exchanges regardless of the type have a 45-day identification period and a 180-day exchange period.
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How much money do you have to reinvest?
In order to defer ALL capital gains and depreciation recapture taxes from the sale of the Relinquished Property the taxpayer must pay an equal or higher price for the Replacement Property than the Relinquished Property was sold. Should any debt or amount not be reinvested this portion, called boot, would be taxable.
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Does it make sense to do a 1031 exchange?
Below is a simple guide that can help determine if your situation qualifies for a 1031 exchange and if a 1031 exchange seems like the best option for your upcoming real estate transaction.
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Does a vacation home qualify for a 1031 exchange?
One of the most common questions asked is whether or a not a vacation property qualifies for a 1031 exchange. There are three basic rules for including a vacation home in a 1031 exchange that were introduced by the IRS in 2008.
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Can you buy a property before you sell a property in a 1031 exchange?
While a taxpayer cannot utilize a traditional, forward 1031 exchange when they are looking to buy replacement property prior to selling the relinquished property, they might be able to utilize a Reverse Exchange.
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