The 2017 Tax Savings You Don't Want To Forget

Feeling nervous about the amount of taxes you owe?

You're far from alone; finances, and tax season specifically, can do that to you.

According to the American Psychological Association’s annual stress report, 90% of Americans are as stressed or even more so than they were last year, and it’s mostly over their finances.

With all this stress, don’t forget about the option of a 1031 exchange and the tax savings it can provide for you.

If you sold investment property in the fourth quarter of 2017 as part of a 1031 exchange, now is a good time to ensure that you properly complete your 1031 exchange.

Section 1031 says that you must complete your 1031 exchange within 180 days after the sale of your relinquished property, or the due date of your tax return, whichever is earlier. This year, the tax return due date is April 17. Thus, if you sold your relinquished property on or after October 19, 2017, you must complete your 1031 exchange before April 17. If you are unable to do so, you must file for an extension on your 2017 taxes.

Filing for an extension on your tax return requires submission of Form 4868, and will get you a six month extension on your income taxes. However, you will not get an additional six months to complete your 1031 exchange. Rather, you will get the balance of the 180 days.

For example, if you sold your relinquished property on December 1, 2017, your 180-day deadline is May 30, 2018. That 43-day window could be very important to the success of your 1031 exchange.

If you have additional questions about Section 1031 exchanges, contact us at info@rs1031.com. And, always consult with your tax and/or legal advisors before starting an exchange.