On most cases the property of the tax payer is identified by his name of which it must be indicated. Since he represents the person who buys the property and the holder of the title who will be responsible for filing the tax returns. As a matter of fact he will be the one to control the property. Another important thing is that single limited company companies can also act as the owner of the property upon agreement by the original property owner.
We also have replacement rule which is also part of 1031 exchange. You should note that this rule can only operate within one hundred and eighty days after the closing of the first property. In addition, the property can also be bought and then replaced with the second property upon closing of the first property and the extension of exchangers return.
In addition to that another 1031 one exchange rule highlights and gives an allowance of 45 days for the post-closing of the first property. It acts as an allowance for the identification of either the accommodator or closing the entity address of the possible replacement of property. You should also note that the property will still be submitted for the purchase in situation when the replacement is packed. Three party rules allows for the selection of three property not considering their values. Compared to two hundred percent rule which only gives chance for selecting of at most three property considering the fact that it should not be past two hundred percent of property sold. To conclude on this rule we have exemption rule which allows for the ninety-five percent of what is identified to be bought if its value of the item sold exceeds two hundred percent.
Another rule is on trading up. It allows for a tax difference of one hundred percent by balancing the net market value and the equity of the property. On the hand the exchange needs to pay the tax on that difference between the market value and equity of the property. The difference is seen to the sense that additional equity can offset debts and vice versa is not true.
The necessities in 1031 exchange cannot be determined immediately due to the fact that there is no hold time. We can talk of finding out whether the first property was acquired immediately before the exchange time or whether it was acquired after the exchange time not forgetting others as well.
You should also know that 1031 exchange is not for personal use but for investment and business property. On that note you will remain in your residence without swapping.