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Posted by Gil Faver on July 6, 2008, 4:47 pm
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I just ran across something touted as a "1031 rescue plan", that causes a
failed 1031 exchange to become an installment sale for the seller, deferring
taxes out into the future. Some of the numbers used in their example are a
bit odd, but the concept seems ok.
Anyone heard of this? I can post a link, but don't know the etiquette for
doing so on this group. I am not trying to spam, here, just pass on some
info and seek some comment.
========================================= MODERATOR'S COMMENT:
- links that are on-topic and either add to an open thread or
introduce a relevant tax related topic, are usually approved.
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<< The foregoing was not intended or written to be used, >>
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<< that may be imposed upon the taxpayer. >>
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Posted by Gil Faver on July 6, 2008, 8:53 pm
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>I just ran across something touted as a "1031 rescue plan", that causes a
>failed 1031 exchange to become an installment sale for the seller,
>deferring taxes out into the future. Some of the numbers used in their
>example are a bit odd, but the concept seems ok.
>
> Anyone heard of this? I can post a link, but don't know the etiquette for
> doing so on this group. I am not trying to spam, here, just pass on some
> info and seek some comment.
> ========================================= MODERATOR'S COMMENT:
> - links that are on-topic and either add to an open thread or
> introduce a relevant tax related topic, are usually approved.
ok, here is one such link:
http://www.nafep.com/1031%20Rescue/1031_rescue.htm
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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by removeps-groups@yahoo.com on July 7, 2008, 11:07 am
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> ok, here is one such link:
>
> http://www.nafep.com/1031%20Rescue/1031_rescue.htm
It sounds as if the qualified intermediary is promising to buy the
property if no one else does. It looks like an insurance program.
Maybe you pay a premium to take advantage of their service, and all
the premiums people pay will be used to buy properties for the 15% of
failures. If the premiums of future customers is used to pay your
installment capital gain, then a court could rule this to be a Ponzi
scheme, and you'd have to pay your capital gains back (though maybe
you would have a claim of right to get back the taxes you paid on it).
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Gil Faver on July 7, 2008, 12:58 pm
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>
>> ok, here is one such link:
>>
>> http://www.nafep.com/1031%20Rescue/1031_rescue.htm
>
> It sounds as if the qualified intermediary is promising to buy the
> property if no one else does. It looks like an insurance program.
> Maybe you pay a premium to take advantage of their service, and all
> the premiums people pay will be used to buy properties for the 15% of
> failures. If the premiums of future customers is used to pay your
> installment capital gain, then a court could rule this to be a Ponzi
> scheme, and you'd have to pay your capital gains back (though maybe
> you would have a claim of right to get back the taxes you paid on it).
no, it sounds like once you sell your property, and the replacement fails,
they qualified intermediary makes your sale an installment sale. The
paperwork has to be done ahead of your sale to allow this possibility.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Bill Brown on July 7, 2008, 1:22 pm
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>
> no, it sounds like once you sell your property, and the replacement fails,
> they qualified intermediary makes your sale an installment sale. The
> paperwork has to be done ahead of your sale to allow this possibility.
I believe removeps's point may be illuminated by this question. Where
does the intermediary get the money to make the payments on the
installment sale contract?
I have another question. Does this existence of this guarantee by the
intermediary disqualify the intermediary under Reg Sec 1.1031(k)-1(g)
(4)?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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