Tulsa Commercial Real Estate Experts - What Are the Restrictions Relating To Finding A "Like-Kind" P

Tulsa Commercial Real Estate Experts - What Are the Restrictions Relating To Finding A "Like-Kind" Property As It Pertains To the 1031 Exchange Program?
by U.S. SBA Entrepreneur of the Year & Cofounder of Fears & Clark Tulsa Commercial Real Estate Group - Clay Clark
In the world of real estate their are lots of laws and I kind of hate to ever write an article about any of them because with the signing of a pen politicians can quickly change all the laws that our entire tax strategies are based on. However, because this law has been around for a while and because we continually get asked questions pertaining to the 1031 Exchange Program, I think it makes sense to discuss it here.
In a typical 1031 Exchange the purchased property must be similar to that of the property sold. The property must be exchanged for "like kind" property. In real estate exchanges, all property is considered "like kind" with all other kinds of property. Does this make sense? No. Why does it not make sense? It does not make sense because a government developed the law.
Obviously this makes no sense at all. But, as the rules are written and as the definitions are currently described an piece of raw land is "like kind" to a hotel. A hotel is "like kind" to a batting cage facility. An office building is "like kind" to a car wash. I would be interested to see what is not like kind. Thus, you can fix it in your mind that all real estate is considered to be "like kind" with all other types of real estate. Try wrapping your brain around that concept. If you need a stapler, I have some extra owns at our Tulsa commercial real estate office. To make you go even crazier, ponder this. A 30-year lease is actually considered to be real property as well, and like kind with all other real properties. So you could sell a building and use your proceeds to sign a 30-year lease which qualifies as a "like kind" purchase as part of the 1031 Exchange Program? Yes. Wow.
However the game changes quite a bit when we move over to the world of personal property. If you were to sell a pool table then you must exchange your property for another pool table. And those pool tables had better be similar baby, or the IRS will come down on you like a hammer. A printer could actually be exchanged for a scanner sense they are both considered to be in the same asset class, but a computer could never be exchanged for a desk or we are in trouble.
For more information about the 1031 exchange program, purchasing Tulsa commercial real estate, Tulsa commercial real estate, Tulsa commercial office buildings, Tulsa office buildings, Tulsa real estate, Tulsa office space, Tulsa commercial space available and Tulsa commercial investment properties please feel free to contact our expert team of commercial real estate professionals today at 918-481-2080. Or you can visit us online at www.FearsClark.com.