Section 1033 is very similar to section 1031 of the Internal Revenue Code. However, section 1033 provides for an exchange period that’s completely different than that of section 1031. Under 1033 you can suffer a loss (such as from theft, storm destruction, or from government seizure or condemnation). What is the replacement period in the context of a 1033? The date of your loss (under destruction or theft) would start the period under that scenario. But in the context of seizure, the process can actually start when there’s the first eminent threat.
So your replacement period can actually commence even before you’ve received any consideration. It can begin when the threat of seizure occurs.
What about the end of the period? The 1033 period typically ends two years after the close of the year in which you received the first payment from which you realized income. That being said, in the case of real estate that is held for investment or business purposes, your period can be extended to three years.
Like-Kind Exchange Company – CPEC1031, LLC
CPEC1031, LLC is a like-kind exchange company working to facilitate 1031 exchanges and 1033 exchanges in Minnesota and across the country. With over two decades of experience, we are well-suited to help you through the process of deferring taxes through a 1031 exchange of real estate. We can help prepare documentation, safeguard your funds, and answer all of your questions about the process. We’ve helped countless taxpayers with their 1031 exchanges. Let us help you too. Contact us today at our Minneapolis office and get started with your next 1031 exchange of real estate!
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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