In a 1031 exchange transaction, the title agent is the party responsible for reporting the sale to the IRS on form 1099-S. That’s an electronic tax filing that goes directly to the IRS. All title companies, escrow companies, closing agents, or whomever is closing on your sale must do a 1099-S to report the grantor that’s conveying the property and how many gross proceeds they’re receiving.
So the IRS will be informed of the property sale. Then it’s the taxpayer’s job to do a 1031 exchange and report the completion of the exchange on IRS form 8824 so they can see how the pieces of the puzzle fit together – the sale of the relinquished property and the purchase of the replacement property.
Capital Gains Tax Deferral via 1031 Exchange
A 1031 exchange can help you defer capital gains taxes on the sale of your investment or business real estate. This is a powerful tool that can be utilized by any United States taxpayer who owns qualifying real estate. Contact the qualified intermediaries at CPEC1031, LLC today to learn more about the benefits of section 1031 and see how we can help you defer capital gains taxes on the sale of investment real estate. You can reach out to us at our Twin Cities office today to see if your property qualifies for 1031 exchange treatment.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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