1) Sold a property. Identified 2 properties of interest within 45 days, wrote contracts on both, and wrote a letter identifying the properties of interest within 45 days. Then, the contracts fell through-both of them :-( . Are on day 65 now. Still allowed to substitute other like kind properties (substantially same as 45 day interest identified properties - but not the same properties) and continue with the exchange?
I would say that you need to ask your 1031 administrator if they allow substitutions. Based on the bolded part of this information from the IRS website
https://www.irs.gov/uac/like-kind-exchanges-under-irc-code-section-1031 I would say you have a an case, but if your administrator doesn't allow substitutions, it doesn't really matter.
The second limit is that the replacement property must be received and the exchange completed no later than 180 days after the sale of the exchanged property or the due date (with extensions) of the income tax return for the tax year in which the relinquished property was sold, whichever is earlier. The replacement property received must be substantially the same as property identified within the 45-day limit described above.Also, keep in mind - you only have 180 days total - no extensions are allowed.
2) Bought a property in a land trust. Rehabbed it. Have owned it for just over a year (slow at rehab). Was never leased or occupied by anyone during ownership. Permissible to 1031 this property? Is it wise to? Details below, if it matters.
Purchase $106K
Rehab $49K
Under contract $177K (likely net (boot) is $171K)
(no mortgage or loans)
Trusts are allowed to set up 1031 exchanges, so, assuming:
1. The property is otherwise qualified;
2. You want to re-invest all $171k back into real estate;
3. You want to/can keep the money in the trust
you would then have to look at the cost to have the exchange administered vs. the current tax savings to see if it's worth it, keeping in mind that you will have to pay taxes on the gains and depreciation recapture eventually, and if the tax laws change between now and then, you may be taxed at a different (potentially higher) rate.
