Split Tax Treatment for Residential Properties
A primary residence generally can't be exchanged, but Rev. Proc. 2005-14 lets some homeowners benefit from both the §121 exclusion and §1031 deferral.
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At Madison 1031, we believe in empowering our clients and partners with the knowledge they need to make informed decisions. Our team of subject matter experts publishes insightful, often-quoted articles and hosts seminars that dive deep into 1031 exchanges and real estate investment strategies. Explore our Knowledge Center for insights that help you stay ahead of industry trends and regulatory changes.
Explore our latest insights on 1031 exchanges and real estate investment strategies:
Understanding Reverse Exchanges
A reverse exchange removes the pressure of the 45-day identification period, but parking the relinquished property adds complexity worth understanding up front.
Delaware Statutory Trusts (DSTs) for your 1031 Exchange
When the 45-day identification period is running out, a DST can offer a fractional interest in institutional-grade real estate, with trade-offs worth weighing.
Exchanges that Cover Two Tax Periods
When an exchange straddles two tax years, filing deadlines, extensions and installment treatment can all affect your timeline and your tax bill.
Can Vacation Homes Qualify for 1031 Exchanges?
A safe harbor from the IRS gives vacation home owners more certainty, provided rental and personal use stay within the rules.
How does Seller Financing Impact your 1031 Exchange?
Seller financing can rescue a deal, but the note means there is no cash to reinvest. Here are the ways to address it.
Using 1031 Exchange Proceeds for Replacement Property Improvements
Exchange proceeds can pay for improvements to your replacement property, if the exchange is structured correctly and the work is finished in time.
Buy First, Sell Later: A Closer Look at Reverse Exchanges
Treasury regulations only address selling first, but a later Revenue Ruling approved a structure that lets investors buy first.
1031 Basics: The Process and Schedule
Timing and reinvestment rules drive every exchange. Learn the deadlines, and what it takes to defer all of your gain.
Drop & Swaps: Can they be part of your 1031 Exchange Strategy?
A Colorado appellate court approved a court-ordered drop-and-swap of LLC properties between a mother and son. Here is why it matters, and why to be cautious.
A Precedential Ruling by the NY Division of Tax Appeals
A New York administrative tax ruling shows how weak records, inconsistent reporting, and poorly supported exchange expense claims can turn into boot and penalties.
1031 Exchanges: A Beneficial Method When Used Appropriately
Section 1031 can be a powerful deferral tool, but timing rules, reinvestment requirements, and a client's broader tax position still determine whether the exchange makes sense.
Languishing Exchange Funds: Some Traps and Dodges
A small drafting choice in the identification notice can decide whether leftover exchange funds are released promptly or remain trapped in the account until the exchange period ends.
U.S. Tax Court on Valid Tax Deferments for Residences vs. Investment Properties
A Tax Court memorandum offers practical guidance on the facts that can help prove a residential replacement property was acquired for investment rather than as a personal residence.
