Of all the misconceptions about 1031 exchanges, this has to be the most common. We hear it from accountants, clients, attorneys, financial publications and many other sources. The frightening thing is that we even hear it from other intermediaries as well! In fact, it was even printed in a brochure of one of the largest QIs in the country!
In case you have any doubt, let us clarify: The IRS does not care what your debt is on your Old or New Property. With regard to the financial aspects of your exchange, they are primarily concerned with two things:
- Is the sales price of your New Property equal to or greater than that of your Old Property? And,
- Did you reinvest all of the cash from the sale of your Old Property?
That’s it!
If you'd like to learn more about this, give any one of our Experts a call.
--The Experts
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