What is a 1031 Exchange?

A 1031 Exchange is also known as a “tax deferred exchange.” This process enables a property seller to shift funds from the sold property to a new investment and defer the obligation to pay capital gains taxes. A 1031 Exchange can be extremely beneficial for property owners who want to build net worth and either consolidate or diversify their holdings. Deferring payment of taxes enables the property owner to improve cash flow, solve management problems, increase leverage and expand their opportunity for greater wealth appreciation.

1031 Exchange Rules

According to the Internal Revenue Service’s Code 1.1013 (k), a person owning property for investment or business purposes can sell their property and purchase like-kind replacement property or properties through the use of a Qualified Intermediary, in order to defer payment of capital gains taxes. The replacement property the exchanger expects to purchase, must be identified within 45 days, and settled within 180 days of the date of settlement of the relinquished property.

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Want to learn more about your tax deferred options?

 

Contact our Northern 1031 Exchange Specialist to find out how you can maximize your real estate investments.

 

Let's Discuss 1031 Exchange

Preserve profit and build wealth through tax deferred exchange.

For more than 60 years, we've handled all kinds of real-estate and business transactions. We know that effectively managing the tax liability associated with a sale, can have a significant impact on your returns.

If you’re planning to sell an investment or business property, you may be able to defer your taxes with Northern 1031 Exchange.* Contact our 1031 Exchange Specialist now to investigate your tax deferred options, improve your cash flow and grow and consolidate your portfolio.

SUCCESS STORY

Northern Bank made it easy.

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Mark Cafua

Franchise owner, Dunkin'

"The biggest benefit of using Northern Bank to handle our 1031 Exchange was that they really helped guide us through the complex process. They made sure we met our tight timelines and made it all seamless for us. The personal attention and communication were phenomenal."

We make the process easier and more secure.

Northern 1031 Exchange has the expertise and resources to streamline your exchange and provide the necessary security of funds. As an operating subsidiary of Northern Bank, Northern 1031 Exchange is subject to supervision and regulation by the FDIC and Massachusetts Division of Banks. We are licensed and regulated, so you can be confident your funds are safe and protected.

We’re here to:

  • Make expert recommendations based on your goals
  • Act as your Qualified Intermediary (QI) — an IRS requirement
  • Manage all required procedures and documentation
  • Handle the entire, complex 1031 Exchange process

Features

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Dedicated exchange specialist
who will simplify the exchange process.

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Calculated estimate of the funds
you might see through the exchange process.

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Regular updates on the latest changes
or nuances in the world of 1031 Exchange.

Services

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COMMERCIAL REAL ESTATE

With our commercial exchange services, we help structure the exchange, provide guidance on partnership division and other complicated ownership structures.

 
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RESIDENTIAL REAL ESTATE

With residential real estate, we assist clients and determine the right exchange for them. Forward, reverse and improvement exchanges are all options for each client and we help them exchange for a property just right for their needs.

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VACATION RENTALS

With vacation rentals, we provide guidance on the IRS safe harbor to ensure a clean and unquestioned exchange, ensuring our clients understand the requirements for holding and renting vacation homes.

*Northern Bank, including its subsidiary Northern 1031 Exchange, LLC does not provide tax, legal or accounting advice, nor can we make any representations or warranties regarding the tax consequences of your exchange transaction. We strongly encourage you to seek appropriate professional advice regarding your specific facts and circumstances.

© 2024 Northern Bank & Trust Company.