Bozeman, MT – Montana 1031 exchange company, 1031 Property Exchange in Bozeman, is now pleased to offer both reverse 1031 exchanges along with construction exchanges.
A 1031 exchange is a transaction for investment property owners where they can defer all capital gains and depreciation recapture when they sell a property.
“We worked on some complex build-to-suit (construction) exchanges in 2018 and 2019, so we are comfortable with the systems we have in place”, says Rusty Squire, Qualified Intermediary with 1031 Property Exchange. He adds, “We successfully completed several reverse 1031 exchanges this year in Montana and feel good about our systems there as well”.
WHAT ARE REVERSE AND CONSTRUCTION EXCHANGES?
Reverse 1031 exchanges are where you acquire a replacement property prior to the sale of your relinquishing property.
Construction exchanges are where you sell a relinquished property, acquire property and attempt to construct a new property that becomes a qualifying exchange upon completion.
“Our Montana 1031 exchange company has developed a good educational process for clients doing both types of advanced exchanges”, says Squire. He adds, “We have to create limited liability companies at the State level that act as exchange accommodating title holding entities for these advanced exchanges because clients cannot come into constructive receipt of real estate, or cash, during their exchange”.
GETTING YOUR DUCKS IN A ROW
“Both construction and reverse 1031 exchange types are tough for many lending institutions to get their heads around because they are lending money on a property where the guarantor is not yet on title”, says Squire. He adds, “This is where it becomes critically important to have a sophisticated lender lined up, one who has experience with these more advanced exchanges”.
“Our Montana 1031 exchange company has found that our pricing for both reverse and construction exchanges is among the most competitive in the State”, says Squire. He adds, “The level of personalized service and availability for clients is our hallmark and you can read testament to this in all of our 5 star Google reviews from real customers”.
TIMING IS EVERYTHING
With reverse, and especially with construction exchanges, you need to make sure you have your ducks lined up and contractors in place ready to hit it hard once your relinquished property has closed”, says Squire. He adds, “They only have 180 days to spend down all of your proceeds before we have to do a reconciliation closing”.
“This does not mean they have to be completed at 180 days, very few builders will ever finish a project in under 6 months”, says Squire. He adds, “Certificates of occupancy often aren’t issued until a year, or more, has passed but the IRS wants to see that you were diligent in getting the exchange proceeds reinvested into the real estate”.
“Reverse exchanges are complex and, as a result, require a lot of advance planning and entity formation”, says Squire. He adds, “Reverse exchanges require a lot of client education because there are several ways in which they can be accomplished”.
If you would like expert assistance in setting up your next reverse or construction exchange then simply contact Montana 1031 exchange company Big Sky Property Exchange at 406-425-2742.
Company Name: 1031 Property Exchange, PLLC
Contact Person: Russ Squire
Email: Send Email
Address:3009 Warbler Way
Country: United States