Guides on how to perform 1031 exchanges with specific types of property or business

1031 Exchange Aircraft [Ultimate Guide]

Not everyone has the privilege of their own private aircraft. Whether it be a propeller plane, private jet, or fleet of helicopters, aircraft possession is usually only reserved for the immensely wealthy or a handful of diehard aviation enthusiasts.

With that in mind, when it comes time to sell an aircraft, a lot of capital is going to be thrown around. No matter the age or operating function, planes and helicopters are generally sold at high ticket prices to wealthy bidders.

Here, experienced investors know of a little trick called a 1031 exchange. In this IRS designated procedure, a taxpayer can evade capital gains taxes on the sale of a large asset by reinvesting the capital in another purchase. In doing so, 1031 exchanges can be used to “trade” aircraft for other private properties.

In this article, we will outline the steps it takes to 1031 exchange aircraft. In doing so, we will illustrate mineral rights and royalties as a great property option for investors looking to maximize the sale of an aircraft.

How to Sell an Aircraft

Even in the third decade of the 21st century, we are still seemingly far away from the cartoon future of flying cars everywhere, owned by everyone, like in The Jetsons. With a limited market, this proves to make private aircrafts somewhat difficult to sell. Here, we recommend working with a broker to help facilitate the sale. Once the deed is done, any registration or FCC licenses in the previous owner’s name must be removed.

Determining the Value of Your Aircraft

Most private aircraft actually retain their value quite well. So long as it was kept in good operating condition and was purchased from a reputable seller, the price you paid for your aircraft may actually be quite similar to the price that you sell your aircraft years later. FOr this reason, jets, planes, and helicopters are a popular business asset for reserving large amounts of money within the organization’s portfolio.

The value of an aircraft is determined by the following attributes:

  • Type of aircraft
  • Make and Model
  • Size
  • Age
  • Condition
  • Fuel efficiency
  • Added or removed features
  • Branded or not branded exterior
  • Navigation features
  • And more

Of course, the true value of any aircraft is only the amount that someone is willing to pay for it. While you may own your aircraft privately or as a part of a company’s asset portfolio, an aircraft can then be sold to individuals or businesses large and small. With that said, planes and helicopters with significant mileage are usually deemed unfit for commercial use by many private businesses and government regulations.

Taxes Paid on the Selling Aircraft

As we mentioned earlier, planes, helicopters, and jets sell for an awful lot of money. Whether it be a one or two comma deal, former aircraft owners can expect a bulge influx in cash if the time comes when they decide to sell. Unfortunately, with every dollar earned, another portion of that dollar may be taxed by local, state, and federal governments.

When selling an aircraft, you can expect to pay:

  • Personal Property Tax and Registration Fees
  • Depreciation
  • Passive Activity Losses
  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

When all is said and done, aircraft sales can come with nearly 40% of the capital gone to taxes. Naturally, one of the best and most common ways to reduce this amount from totaling beyond its worth is to 1031 exchange aircraft.

1031 Exchange Aircrafts

In a 1031 exchange, aircrafts sold and replaced with an asset of equal or greater value will result in the complete deterrence of capital gains taxes that would have been otherwise paid. Whereas it is possible to only partially eliminate some of the capital gains taxes paid on the sale of an aircraft, most investors choose to “trade up” for another aspect that is either functional or financially favorable.

Aircraft Like Kind Properties

In order for a 1031 aircraft exchange to be valid, an aircraft must be replaced with a “like-kind” property. The IRS is pretty open to what can be considered similar, largely viewing most property assets as in the same vein. With that being said, helicopters, planes, and jets can be used in a 1031 exchange to purchase:

  • Homes
  • Apartments
  • Convenience Stores
  • Farms
  • Water and Ditch RIghts
  • Mineral Rights and Royalties
  • And more

1031 Exchange Aircraft – Timeline

Although it may take some time to find the right buyer, as soon as the sale of an aircraft is officially complete, then the taxpayers’ eligibility for a 1031 aircraft exchange begins immediately. From here, at least one potential property must be identified for purchase within 45 days. Following this, a new property must be purchased within 180 days (or roughly half of a year) in order to avoid paying capital gains taxes on the sale of their aircraft.

Using an Intermediary to 1031 Exchange Aircraft

Obviously, deadlines must be met and paperwork must be filed to complete a successful 1031 aircraft exchange. While both time-consuming and laborious with extreme attention to detail required, it is recommended that investors work with a 1031 exchange intermediary to maximize the sale of an aircraft.

What to 1031 Exchange Aircraft For?

In the United States of America, private landowners can buy and sell their properties subsurface in the form of mineral rights. With mineral rights, the land can then be leased to oil and gas companies looking to find, extract, and sell the natural resource found beneath the earth’s surface. Once it’s sold, mineral rights owners will then receive mineral royalty payments as a fixed percentage of the operation’s income.

Conclusion

When it comes time to 1031 exchange aircraft, purchasing mineral rights is one of the best portfolio adjustments that is exclusive to a few select countries. In doing so, mineral rights can generate highly profitable streams of income through monthly royalty payments or another large lump sum in a future sale.

How to 1031 Exchange Communication Towers into Mineral Rights & Royalties

Although they’ve changed shape, size, and function over the years, communication towers have been a part of our society for over a century. From radio to television to internet and phone networks, communication towers are a strong asset in the information age.

For the most part, communication towers are generally leased to companies that provide network services or individual portrayers of radio or other media. While leasing is a great option to maintain ownership of your tower, oftentimes companies wanting to secure their assets will buy communication towers for large amounts of money.
Unfortunately, with a huge amount of cash usually comes to a large portion of the sale to be paid in taxes.

Thankfully, capital gains taxes from the sale of a communication tower can be avoided if a 1031 exchange is used to purchase a new like-kind asset.

In this article, we will break down the steps in selling a communication tower and transferring the capital to a new asset with a 1031 exchange. Today, few portfolio assets are stronger than mineral rights, which we will showcase as a great option for reinvesting to both avoid capital gains taxes and secure a strong financial future.

How to Sell a Communication Tower

First things first, to use a 1031 exchange you must sell your communication tower. Unfortunately, communication towers are not as easy to sell as secondhand clothes or records, but rather there is a very limited pool of potential investors for personal use. With that said, communication towers are highly desirable assets, so beware of lowballing deals for opportunists looking to leverage their networks for a quick resell.

Thankfully, there are a few local, regional, and national broker organizations that specifically work with communication towers. If you’re looking for a fast, efficient, and fair sale without putting in much time or effort, we recommend working with capital advisors who have experience with communication tower sales.

Determining the Value of Your Communication Towers

Now before you hand your tower over to another investor or company, it is important to have a rough understanding of its value. While you may have been leasing the communication systems to a company, the outright sale of a tower can be well beyond 15 times that of the monthly rent. While every sale is different, the value of most communication towers is assessed on a few key attributes. These include:

  • Location
  • Accessibility
  • Layout and design of the site
  • Type of tower, materials, and supports
  • Equipment technology (owned vs leased)
  • Lighting, buildings, and other onsite features
  • And more

Communication towers are now in demand more than ever before. Whereas many speculate that towers will ultimately be replaced by satellites, there is still a large and growing demand for cellular towers all across the globe.

Taxes Paid on the Selling Communication Towers

As we mentioned earlier, big sales generally come with large taxations. Communication towers are no different, as huge sales to brokers and large corporations warrant deals susceptible to significant amounts of capital being taxed at the time of the deal. Depending on the location, the following are generally taken from the outright sale of a communication tower.

  • Sales Taxes
  • Federal Income Taxes
  • Capital Gains Taxes
  • Local Taxes
  • And More

With all of this added up, taxpayers can expect to lose over 30% of their communication tower sales to local and federal governments. Of course, some of this can be deferred, as capital gains taxes can be avoided with a 1031 exchange.

Selling Communication Towers with a 1031 Exchange

A 1031 exchange (also known as a section 1031 exchange) is an IRS procedure that allows for the total elimination of capital gains taxes on the sale of a communication tower. In order to be completed, the same taxpayer must purchase a new property asset to replace the communication tower in a virtual “trade” or “exchange.” If the new property is of the same or greater value than the communication tower, then all of the capital gains taxes that would have otherwise been paid can be completely deferred.

Communication Towers Like-Kind Properties

The IRS has defined “like-kind” properties rather loosely so that investors can replace communication towers with many other forms of personal property. In fact, if you sell your cell tower, you can replace it without having to pay capital gains taxes for any of the following:

  • Mineral Rights and Royalties
  • Artwork
  • Collectibles
  • Farmland
  • Water and Ditch Rights
  • Apartment Buildings
  • And much more

Communication Towers 1031 Exchange Timeline

Once a communication tower is sold, then taxpayers can begin to identify properties eligible for the 1031 exchange. In total, up to 3 portraits can be identified regardless of their value. First, one must be identified within 45 days of the sale. After that, the exchanger then has the rest of the 180 after-sale periods to successfully purchase one of the new properties.

1031 Exchange Intermediaries for Selling A Communication Tower

As with any governmental procedure, there is an extreme attention to detail required to successfully complete a 1031 exchange. With the help of a specialized intermediary, taxpayers can avoid the hassle of tireless paperwork, property identification, and more. Meeting deadlines is essential here, as eligibility is completely eliminated after 6 months.

Why Purchase Mineral Rights?

While investors can reroute their money anywhere, the sale of a communication tower can be maximized with a savvy reinvestment. Here in the United States, individuals are permitted to own mineral rights which can then be leased to oil and gas companies. With this, mineral royalty checks are rewarded to mineral rights owners as a fixed percentage share of the monthly resource sales found on the property.

Conclusion

Communication towers, primarily used for cell phone networks, are an important and necessary part of today’s society with significant red tape and barriers to entry. With that in mind, constructed and functional towers can be sold for enormous profit margins. In the United States, mineral rights a sound reinvestment with a 1031 exchange for both deferring capital gains taxes and establishing a future income stream.

1031 exchange artwork

1031 Exchange Artwork [Ultimate Guide]

Artwork and mineral rights do not have a lot in common. Whereas one hangs on a wall or appears in a gallery, the other is deep below the surface of the earth. Perhaps the only thing that artwork and mineral rights have in common is that both of these assets could be found in a well-balanced investment portfolio.

As energy becomes more important with each passing day, mineral rights continue to be one of the most valuable assets that American investors can hold. If the time has come to part ways with a piece of art, large sales can be maximized with a smart reinvestment.

In this article, we will break down the steps to take to 1031 exchange artwork. In doing so, we will showcase how like-kind properties such as mineral rights are the best way to maximize the sale of artwork.

How to Sell Your Artwork

Artwork has been one of the longest standing types of assets throughout human history. Today, artists around the globe are selling their work in galleries, both online and in person. While there are a million different ways to network and sell pieces of your own artwork, this guide is intended to help investors who purchase and sell fine art for their home, office space, and more.

You can 1031 exchange artwork only once the artwork is sold. If you are trying to sell a private collection of fine art, there are a few different methods you can choose. Most commonly, investors choose to work with an art dealer. With mitigation and connections, a dealer may be able to accelerate the sale of your art at a similar or increased price for what you originally paid for it.

Determining the Value of Artwork

Artwork is tough to put a price on. In fact, it is safe to say that most people in the world have walked through a “fine art” gallery only to be left in shock to learn about the great expense of relatively simple-looking art pieces. With that being said, the fine art market continues to boom throughout the modern age and the price of a piece or portfolio is truly only equal to the price that someone is willing to pay for it.

Depending on the nature of the piece, any artwork is usually priced on:

  • The Size
  • The Materials
  • Framing vs. Unframing
  • Transportation Concerns
  • Artist Reputation
  • Quality
  • And more

Taxes Paid on the Selling Artwork

When selling artwork, the sky’s the limit. While starving artists may never get their reward, there are also many pieces around the world being exchanged for huge sums of money. While cash deals at artist’s markets may never see taxes being applied to the profits, there are considerable taxes paid on the sale of large private pieces and collections of art. Typically this includes:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

1031 Exchange Artwork

Depending on how long you held your artwork in your private gallery or collection, the sale may have short or long-term capital gains taxes applied. This could be anywhere from 0 to 20% of the piece’s final price, depending on how much the artwork is sold for.

With a 1031 exchange, artwork can be sold without having to pay any capital gains taxes. Here, the artwork must be “exchanged” for another asset within a fixed period of time. In doing so, reinvestments of funds qualify for complete or partial deferral of capital gains taxes.

Artwork Like-Kind Properties

The IRS qualifies pieces of fine art into the private property category. This means that artwork is no different than your house, your clothes, or your car and it can be bought and sold on the open market as a privately owned good.  In a 1031 exchange, artwork can be sold in exchange for:

  • Mineral Rights and Royalties
  • Homes and Apartments
  • Trailer Parks
  • Shopping Malls
  • And so much more.

1031 Artwork Exchange Timeline

With artwork sales, finding the right buyer is everything. Sometimes this is accomplished as soon as the piece premiers, whereas other times fine art can be held in a private gallery for many years before being purchased by an art collector. With this in mind, the clock begins ticking on 1031 atrwork exchange eligibility as soon as a piece of artwork is sold.

Within 45 days of the sale of the artwork, one property must be identified for a like-kind 1031 exchange to be valid. Beyond this, taxpayers have exactly 180 days to purchase the new property for the elimination of capital gains taxes.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

Using an Intermediary to 1031 Exchange Artwork

With the paperwork to file and deadlines to meet, we highly recommend working with a 1031 exchange intermediary when selling artwork and eliminating capital gains taxes. In doing so, taxpayers can focus more on their time identifying and evaluating potential assets.

What to 1031 Exchange Artwork For?

More than anything, we strongly recommend that first-time sellers and experienced investors consider purchasing mineral rights in a 1031 artwork exchange. As the owner of a property’s subsurface, mineral rights holders can enter into mineral rights leases with oil and gas companies.

In doing so, a steady stream of mineral royalty payments can be earned as a fixed percentage on the monthly profits from natural resource sales. Mineral royalties are only available in a few countries throughout the world, with the United States being one of the few nations that allow the private ownership of mineral rights.

Conclusion

In conclusion, we hope that this article was helpful to people selling their artwork and hoping to utilize a 1031 exchange. When comparing new, like-kind properties, we strongly suggest considering mineral rights as a great part of any diverse investment portfolio.

1031 exchange rental property

1031 Exchange Rental Properties [Ultimate Guide]

One of the most common ways to make your money work for you in the United States is to invest in a rental property. Homeowners begin to realize fairly quickly that purchasing a property and renting it to another is a great way to earn passive income without having to perform that may day to day tasks.

Of course, rental properties do not always pan out the way that some land and building owners had expected. While some properties may have trouble acquiring consistently paying tenants, other assets may be better off sold for a tremendous amount of money.

With a large sale, comes large taxes. If you plan to sell your rental property, then it is important to be aware of the possibility of a 1031 exchange, which is one of the smart tools used by many savvy investors. In this article, we will outline the steps necessary to 1031 exchange rental property and maximize the potential for reinvesting your funds.

How to Sell Your Rental Property

Of course, you can 1031 exchange rental property only once the property is sold. Rental properties are not by definition rental properties but rather they are only considered so because of the way they are being sued. If you sell your rental property to a new owner, they may live in the space part or full time without continuing the legacy of leasing out space.

With this in mind, coastal areas and vacation destinations are full of short-term rental properties, whereas most American cities are filled with long-term rental properties looking for monthly tenants. This can be in the residential, commercial, and industrial spaces.

With all of this in mind, there are essentially an unlimited amount of ways that you can go about selling your rental property. The secret is to find the right buyer and put the property in front of as many potential investors as possible. Today, this is most commonly utilized by taking advantage of online retailers, specialty real estate agents, and property auctions

Determining the Value of a Rental Property

Depending on the type of property, a rental space can have a tremendous range of values. Rental properties are essentially a sum of their parts, but also have a lot of external factors to consider when putting a price tag on a personal asset.

In most instances, the value of a rental property is determined by:

  • The size of the property
  • Number of buildings and building types
  • Property leasing history (short vs. long term)
  • Current physical condition
  • Market trends
  • And more

Of course, the true value of your rental property is only the amount that someone is willing to pay for it. Smart bargaining and demonstrated income potential will serve as allies when putting your rental property in the eyes of serious buyers.

In some cases, existing tenants may be interested in purchasing the property that they are currently leasing. While this is saving them a ton of time and cost on moving, selling to existing renters is usually done so at a discounted rate if the relationship has been strong thus far.

Taxes Paid on the Selling a Rental Property

Rental property sales are typically for a lot of money. Unfortunately, this means that rental property sales generally come with a large amount of taxes paid on the income generated from the financial exchanges. While landowners are no stranger to paying property taxes, most expenses applied to the sale of a rental property are one-time-only. These include:

  • Depreceiation Recapture
  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

With governments taking their piece of the pie, it is not uncommon to pay as much as 40% in taxes on the sale of a large rental property. Some of this can be avoided, however, if taxpayers choose to utilize a 1031 rental property exchange.

1031 Exchange Rental Property

Rental properties can be sold using a 1031 exchange, which is an IRS-designated procedure to eliminate the partial or total amount of capital gains taxes on the sale of private property. By trading up for another large investment, taxpayer’s capital gains taxes can be deferred if they are reinvesting the proceeds from a rental property sale into a new kind of asset.

As with most governmental dealings, 1031 rental property exchanges can be painstakingly detail-oriented with paperwork and deadlines to fill out and meet with precise requirements. Because of this, we strongly recommend that both new investors and experienced wealth managers use a 1031 exchange intermediary to make sure that everything is done correctly.

Rental Properties Like-Kind Properties

First, rental properties must be exchanged for something that is “like-kind” for a valid 1031 exchange. Thankfully, the IRS views rental properties in the same what that they do most other private assets. For this reason, rental properties can be exchanged for

  • Commercial Buildings
  • Gas Stations
  • Shopping Malls
  • Apartments
  • Homes and Condos
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And more

1031 Exchange Rental Property – Timeline

Once a rental property is finally sold, then taxpayers have 180 days to purchase a new asset to qualify for a 1031 exchange. Before this, at least one property must be identified (but not necessarily purchase) within 45 days of the sale.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Rental Properties For?

At the end of the day, there are a lot of different ways that you can reinvest the funds from a rental property sale. However, the United States is one of the few countries that permits taxpayers to invest in might rights.

By purchasing mineral rights, you can become the owners of the subsurface of a property. With this, you can enter into an oil and gas lease, which allows energy companies to extract and sell resources from your proeprty. In doing so, mineral rights can be used to establish another great passive income stream, from monthly mineral royalty payments.

collectibles

How to 1031 Exchange Collectibles into Mineral Rights & Royalties

While many people do not understand the lure of certain collectibles, there are a ton of different kinds of high price tag items that can be sold to enthusiasts around the world. From coins and watches to antiques and cars, collectibles can be sold individually or as part of a larger collection of unique products.

If you sell a collector’s item for a significant amount of money, then taxes will be applied to the sale. For function or decorative, one of a kind pieces of history, taxpayers can choose to utilize a 1031 exchange on the sale of a collectible. In doing so, capital gains taxes can be deferred so long as another property is purchased in the collectible’s place.
Whenever it comes time to let go of your collectibles, we highly recommend looking into purchasing mineral rights through a 1031 exchange. With mineral rights, nothing is taking up space in your house and a mineral royalty check may be in the mail next month.

In this article, we will outline the steps to take in order to properly sell collectibles with a 1031 exchange. After this, we will make the case for mineral rights and royalties as one of the best possible reinvestments of your capital.

How to Sell Your Collectibles

To initiate a 1031 exchange, first, you must sell your collectible property. Obviously, there are a ton of different personal property items that can be considered a “collectible.” Under IRS law, the following can be considered a collectible in the event of a 1031 exchange:

  • Cars
  • Rugs
  • Antiques
  • Coins
  • Stamps
  • Metals
  • Gems
  • And much more

If there is a dedicated community around your collectible, the best way to sell your item is to connect with members of that community that may be interested in purchasing it. With this in mind, it has never been easier to interact with a global community on the internet. Depending on your collectible type, if it is valuable, there is probably a message board somewhere that would be interested in learning more.

Determining the Value of Your Collectibles

As we alluded to earlier, collectibles come in all shapes and sizes. Whereas some collectibles lose their value (sorry, Beanie Babies), others may appreciate in value over time. In some cases, collectibles will have dedicated websites or in-person events in which enthusiasts can freely buy or sell their collectible items.

There are many factors that influence the value of a collectible, including:

  • The approximate market value
  • Condition
  • Age and number of previous owners
  • Type of sale (i.e. to an individual or resale shop)
  • Ability to bundle with other collectibles in the same deal
  • Shipping or logistics
  • And more

If they are not functional, collectible markets can be very unpredictable. While many private owners simply collect for the love of the game, there usually comes a time to depart with assets that either take up space or are ripe for selling.

Taxes Paid on the Selling Collectibles

If you sell your collectible property for a significant amount of money, then you can also expect to pay a significant amount of money in taxes. Although the exact figure is largely dependent on your location and size of your sale, the following are usually applied on high-ticket collectible sales:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

Experienced investors are well aware of capital gains taxes, whereas those selling their first collectible at a highly appreciated rate may not. Capital gains taxes are only applied if a significant amount of money is made on the sale, but they can also be avoided with a 1031 exchange.

Selling Collectibles with a 1031 Exchange

With a 1031 exchange, the IRS allows individuals to essentially “trade” collectibles for another property in order to avoid paying capital gains taxes. If the new property is of greater value than the collectible, then it is likely that a taxpayer will become eligible to defer 100% of the capital gains taxes that would otherwise have been applied.

Collectibles Like-Kind Properties

According to the tax code, collectibles must be replaced with a “like-kind” property in order for a valid 1031 exchange to be accomplished. Although most collectors may not consider their items to be similar to homes or stores, the reality is that a 1031 exchange can be used to purchase practically any kind of personal property while deferring capital gains taxes.

The IRS considers the following “like-kind” properties:

  • Mineral Rights and Royalties
  • Farms
  • Homes
  • Condos
  • Apartments and apartment buildings
  • Stores and strips malls
  • And s much more.

Collectibles 1031 Exchange Timeline

The day you sell your collectible, your eligibility for a 1031 exchange begins. In the first 45 days, you must identify at least one property that can be considered as a reasonable replacement for your capital. In total, taxpayers have just 180 days, or about 6 months, to purchase a new property in a 1031 exchange.

1031 Exchange Intermediaries for Selling Collectibles

With deadlines to meet and paperwork to file, many first-time and experienced investors choose to use a 1031 exchange intermediary when selling collectibles. In doing so, specialized industry professionals can help make sure everything goes as planned while helping to identify market-specific properties for the exchange to be used to purchase.

Why Purchase Mineral Rights and Royalties?

Mineral rights and royalties are a strong part of many American portfolios, even though they are not readily available throughout the world. Here in the United States, it is impossible to lease your mineral rights to oil and gas companies in order to extract and profit from the natural resources in your property’s subsurface.

With monthly mineral royalty payments, investors can receive a passive income stream generated from a successful oil and gas lease. In today’s world, resource scarcity is as critical as ever, making mineral rights a sound investment for leasing or reselling in the future.

trees

How to 1031 Exchange Timberland into Mineral Rights & Royalties

When the word “timberland” is brought up today, most people’s first associations that come to mind are usually not related to the term’s original definition. To many, Timberland is just a footwear brand. To others, Timbaland is a famous American music producer. To savvy investors and industry workers, however, Timberland is simply a privately owned patch of property designed to grow and harvest lumber.

Timberland is a great asset for producing massive amounts of wood above a property’s surface that can be used as fuel, framework, and furniture. With this in mind, timberlands are commonly purchased, developed, and sold for large profits.

In order to maximize the sale of a timberland’s profits, taxpayers can use a 1031 exchange to defer the capital gains taxes on the sale. In today’s resource-scarce world, we recommend investors turn below the surface of the earth for their next investment with mineral rights.

In this article, we will outline the steps to take in order to sell timberland and utilize a 1031 exchange to purchase mineral rights.

How to Sell Your Timberland

The first step to using a 1031 exchange is to sell your property. Selling timberland has been commonplace since before the United States was even founded, so there are many long-standing systems in place for finding a buyer. Today’s timberlands are owned by a myriad of different kinds of private investors and companies, with many organizations purchasing timberlands with a Real Estate Investment Trust.

Selling Timberlands is rarely done alone, and is usually most profitable with the help of a specialized intermediary. With this said, today’s technology makes it easier than ever to sell timberland in digital marketplaces that can attract buyers from anywhere in the world at any time.

Determining the Value of Your Timberland

One of the most commonly asked questions when selling timberland relates to determining its value. Timberland can be bought and sold on the open market, and sellers can usually see similar lands for sale and base their initial pricing off of that figure.

Timberland is valued on a small set of criteria that includes:

  • Land size
  • Current status and conditions
  • Access and distribution channels
  • Additional income stream (i.e. mushrooms, nuts, etc.)
  • Current profitability

Of course, the price at which you sell your timberland can only be valued at the price of which an individual is willing to pay. Timberland is generally sold to private investors, but can also be sold to national and local land preservation organizations for a large one time deal.

Taxes Paid on the Selling Timberland

If all of your hard work has paid off and you made it big selling your timberland, don’t start counting your money too soon. Nearly 40% of your sale may be taxed by local, state, and federal governments through a variety of rates. Depending on your location, timberland sales can be influenced by:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

As some first-time investors may not know, a 1031 exchange is an IRS provided opportunity to defer some or all of the capital gains taxes paid on the sale of timberland.

Selling Timberland with a 1031 Exchange

With a 1031 exchange, the sale of timberland must be followed by the purchase of similar property investment. If the new purchase is of equal or greater value then taxpayers are likely able to defer all of the capital gains taxes paid on the sale. To do so, investors must meet timelines and file the proper government paperwork. In most cases, taxpayers will use a 1031 exchange intermediary to ensure that everything goes as smoothly as possible.

Timberland Like-Kind Properties

According to the IRS code, timberland sales are eligible for a 1031 exchange with the subsequent purchase of most kinds of personal property. As both land and the grounds for business, timberland is one of the oldest but most interesting investments available in the United States.

In the event of a sale, a 1031 exchange can be used to purchase:

  • Farmland
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • Golf Courses
  • Collectibles
  • And more

Timberland 1031 Exchange Timeline

Although it may take a considerable amount of time on the market for a patch of timberland to sell, once it is sold, the clock starts on your opportunity to cash in on a 1031 exchange. Taxpayers have an exact 45 days after the sale to properly modify one eligible, like-kind property. After that, there is a total window of 180 days to purchase a new property that will be permissible for a valid 1031 exchange.

Why Purchase Mineral Rights and Royalties?

Like timberland, mineral rights can be leased to a resource production company. Here, oil and gas companies can go about finding, extracting, and selling the natural resources that are found within your mineral rights designation.

In doing so, mineral royalty payments are signed to your name as a fixed percentage of the operation’s monthly revenue. As an owner of a subsurface asset, you are then in control of renewing a mineral rights lease or selling your mineral rights to another owner.

Here, the main difference is that timberland produces a renewable resource, whereas mineral rights do not. With this in mind, the window for investing in affordable mineral rights may be closing as the resources become more and more valuable. For this reason, mineral rights are a sound investment after selling your timberland.

Conclusion

At the end of the day, timberland is a strong investment. However, this means that developments and improvements can lead to large sales when the time is right. In order to get the most out of your timberland sale, a 1031 exchange can help defer costly capital gains taxes. When considering your new property, mineral rights are among the most similar and smartest reinvestments available today.

1031 exchange hotels

1031 Exchange Hotels and Motels [Ultimate Guide]

From a business standpoint, owning a hotel or a motel is one of the most interesting property types in a portfolio. While a highly profitable daily rate can lead to enormous cash flow, uncontrollable influences may lead to a hotel’s or motel’s ultimate demise.

So when you’ve decided that your hotel has had its last facelift, you may be interested in selling your property to invest our money elsewhere. In both hotel and motel sales, a 1031 exchange can be utilized to eliminate capital gains tax when reinvesting in a new property.

Unlike hotels and motels, mineral rights and royalties rarely have as much upkeep or attention required to benefit from the investment. In this article, we will outline the steps necessary to 1031 exchange hotels and motels into mineral rights and royalties.

How to Sell a Hotel or Motel

Of course, in order to 1031 exchange hotels and motels, you must first obviously sell it. Selling a hotel or motel may actually be considerably harder to sell than you may have anticipated. In communities with dwindling populations or tourism, hotels and motels commonly sit on the open market for months and even years on end.

Today, most hotels and motels are sold with the help of a commercial real estate agent. In some cases, the hotel’s property may only be sought out for the desirable land it occupies, whereas the majority of new owners will likely try to operate the businesses or repurpose the structure.

Determining the Value of Your Hotels and Motels

Whether you are using the help of a professional third party or not, it’s always a good idea to know the approximate value of your hotel when trying to sell it in the open market. As most hotels are sold as operational entities, there are a considerable amount of factors that go into determining the value of a hotel or motel.

Some of these include:

  • Property Size
  • Building Size and Condition
  • Current Assets (i.e. beds, dressers, TVs, etc.)
  • Staff and Business Conditions
  • Branded chains vs. non-branded
  • Hotel vs. motel
  • Amount of Parking
  • Location
  • And more

While it may be challenging to tally all of your assets into one magic number, hotels and motels are being sold all around the country. With this in mind, it is not difficult to check online marketplaces to see the average hotel and motel prices in current market conditions.

Taxes Paid on the Selling Hotels and Motels

When piecing it all together, both hotels and motels can be sold for enormous amounts of capital. Since the dawn of time civilization, however, taxes have been taken out of large property sales, and hotels and motels are no exception.
In the United States, the following are paid on the sale of a hotel or motel:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Depreciation Recapture
  • Sales Taxes
  • Local Taxes
  • And More

So clearly, taxes will add up when selling a motel. Of course, as we mentioned before, capital gains taxes can be deferred if trading a hotel or motel with a 1031 exchange.

1031 Exchange Hotels and Motels

With a 1031 exchange, hotels and motels can be traded for properties of equal or greater value in order to fully avoid any capital gains tax imposed. Properties must be bought and sold by the same taxpayer and deadlines must be met as per IRS regulations.

With this in mind (and the idea of filling out detailed government paperwork), we highly recommend using a 1031 exchange intermediary to handle the tax process and/or assist with the property identification.

Hotels and Motels Like-Kind Properties

According to the IRS tax code, 1031 exchanges are only valid if the properties bought and sold are of “like-kind.” Essentially, what this means is that the assets in question must bear at least some kind of similarities. Thankfully, hotels and motels are considered as both property and business entities, allowing them to be exchanged for a large number of like-kind properties.

This includes:

  • Apartments and apartment buildings
  • Single-family homes and condos
  • Trailer Parks
  • Farms
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And much more

Hotels and Motels 1031 Exchange Timeline

Once a hotel or motel is sold, taxpayers have 45 days to identify at least one property that can be considered for the 1031 exchange. This property does not necessarily need to be the one purchased, but an asset must be acquired within 180 days of the sale for a valid 1031 exchange. Up to 3 properties can be identified, regardless of their value.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Hotels and Motels For?

Of all of the property assets that can be bought and sold in the world, mineral rights and royalties are one of the only ones that are unique to a few countries. Here in the United States, the acquisition of mineral rights can lead to extensive mineral royalty payments under the right oil and gas lease.

While a hotel or motel requires frequent decision making for the continuous operation of the property, active mineral rights are a rarely-seen, yet a highly-desirable piece of many great investment portfolios.

Conclusion

Hotels and motels have been around forever and will likely continue to function as a large chunk of commercial real estate property throughout the world. With this in mind, hotels and motels are bought and sold constantly, sometimes out of desperation and other times out of pure profit.

Either way, when selling a motel or hotel, a 1031 exchange is great for quickly reinvesting your money with the least amount of capital losses in the process. In the United States, mineral rights and royalties should always be considered as a great opportunity for return on investment.

Hospital-Equipment

How to 1031 Exchange Hospital Equipment into Mineral Rights & Royalties

Hospital equipment can be very expensive, as the business of saving lives does not come cheap. Whether you are operating a hospital, urgent care center, or clinic (or simply have some high-powered devices at home for your own needs), selling hospital equipment can actually lead to tremendous financial gain.

In fact, price tags on hospital equipment sales are often large enough to warrant a capital gains tax be levied as a fixed percentage of the final dollar amount. In order to avoid paying these taxes, a 1031 exchange can be used to “trade” any piece (or multiple pieces) of medical equipment for a new property, capital gains tax-free.

In this article, we will outline the steps necessary to complete a successful 1031 exchange when selling hospital equipment. Beyond this, we will make the case for mineral rights and royalties as one of the strongest possible ways to reinvest your finances.

How to Sell Your Hospital Equipment

Just like in homes and apartment buildings, there are also dedicated websites and resources for selling hospital equipment such as medibid.com, medwow.com, and more. Here, medical equipment can be bought and sold in both large and small quantities, from hospital beds to individual syringes and tests.

In most cases, it is much easier to sell used hospital equipment to individual buyers looking to bring service into their own homes. This is largely because hospitals are very particular about the equipment they source and use. With that said, underfunded hospitals around the world may be forced to purchase used equipment, so long as it is still functioning properly and safely.

Determining the Value of Your Hospital Equipment

With such a wide range of different kinds of hospital equipment, it is tough to give an overall estimate of how much any given property will sell for. Instead, hospital equipment is almost always priced by piece, with the final sale price as an accumulation of each part’s value. The easiest way to determine the value of your medical equipment is to check current market listings. While undervaluing your property may lead to a quicker sale, medical equipment is always going to be necessary and retains its value very well.

Taxes Paid on the Selling Hospital Equipment

Unless you are trading bandaids for cold hard cash, professional exchanges of hospital equipment for real income often lead to considerable taxation. In the United States, medical equipment sales are generally subject to:

  • Federal Income Taxes
  • State Income Taxes
  • Depreciation Recapture
  • Sales Taxes
  • Local Taxes
  • And More

Of course, with large hospital equipment sales, capital gains taxes may also be applied to those earning a considerable income from the transaction. If capital gains taxes are applied on the sale of your medical equipment, some or all of the cost can be avoided when making use of a 1031 exchange.

Selling Hospital Equipment with a 1031 Exchange

With a 1031 exchange, hospital equipment can be sold and “traded” for a new property in order to defer capital gains taxes. By reinvesting your money in a new asset, the IRS allows 1031 exchanges to be completed by the same taxpayer, saving considerable amounts of capital on taxes otherwise paid.

Hospital Equipment Like Kind Properties

Under the IRS code, hospital equipment is considered to be personal property that serves a function for both businesses and individuals. With this wide spectrum of consideration in mind, hospital equipment can be considered “like-kind” properties to a number of different assets.

While hospital equipment cannot be exchanged for everything on the open market, the IRS considers the following “like-kind properties” eligible for a 1031 exchange:

  • Artwork
  • Collectibles
  • Leasing Portfolios
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And more

Beyond this, hospital equipment can also be exchanged for single-family homes or apartments. Although most private sellers are not selling hospital equipment at such high values, it is fairly common for medical practices to upgrade equipment and sell their used devices for considerable amounts.

Hospital Equipment 1031 Exchange Timeline

Once the transaction is complete, taxpayers have 180 days to acquire a new asset for a valid 1031 exchange to transpire. With this six month period in mind, it is also important to know that at least one property must be identified within 45 days of the sale of hospital equipment.

In order to properly meet deadlines and file correct government paperwork, we highly recommend utilizing a 1031 exchange intermediary to make the process as smooth as possible.

Why Purchase Mineral Rights and Royalties?

Although they are little known to many investors, mineral rights can be one of the most profitable assets in portfolios across the country. Here in the United States, mineral rights can be purchased to acquire a portion of or the entire property’s subsurface.

With active mineral rights, a leased oil and gas company handles all of the onsite operations from exploring to extracting, to marketing and selling the natural resources of the property. As a mineral rights owner, you are then entitled to a portion of each month’s sales, which come in the form of ongoing royalty payments.

Here, your mineral rights are not so much a physical asset, but rather a passive income stream in your portfolio. After selling hefty medical equipment, mineral rights and royalties are usually a welcome and smart investment.

Conclusion

In conclusion, 1031 exchanges are great for deferring capital gains taxes after the sale of medical devices. While medical practices may rarely consider mineral rights as a working asset of their business, individual sellers have tremendous opportunities to reinvest their capital into mineral rights and royalties. In doing so, a new income stream is created and less medical equipment is taking up space in your home or facility.

Today, we highly recommend working with an intermediary when selling your medical equipment and purchasing mineral rights in order to successfully maximize the benefits of a 1031 exchange.

apartments

How to 1031 Exchange Apartments into Mineral Rights & Royalties

Everyone remembers the day that they bought their apartment. However, not everyone is lucky enough to be able to remember the day they traded their apartment for something even more valuable.

In today’s world, the sale of an apartment anywhere (and on any floor) can lead to a huge influx of cash. As urbanization and property values skyrocket across the United States, the sales prices of apartments follow suit nationwide.

So if you’re ready to explore larger pastures, it just may be the right time to sell your apartment. However, what you may not know is that 1031 exchanges are available to help you keep more proceeds from your sale, by reinvesting the money in another property.

In this article, we will outline the steps that must be taken in order to successfully sell an apartment using a 1031 exchange. After this, we will explore the idea of reinvesting into mineral rights and royalties.

How to Sell an Apartment

In many people’s experiences, selling an apartment is actually an incredibly easy process. Real estate agents nationwide are standing by and ready to show your property to a number of interested buyers, so most people usually choose to hire a professional. Occasionally, large apartment complexes may have an in=house team of managers who are ready and willing to help.

In other cases, selling an apartment without the help of a real estate agent is always possible, and growing in popularity. With linter listings becoming the new norm, smart investors are finding ways to keep as much of the pie from an apartment sale as possible.

Determining the Value of Your Apartment

Of course, to sell your apartment, you will need to determine its value. In a sense, the highest value of your apartment is simply the maximum price that a buyer is willing to pay for the property. In good market conditions, it is always advised to over-value your apartment. However, if you are in an area with many other properties for sale, you may need to undervalue your apartment to find a quicker sale.

The total asking price for an apartment is determined by:

  • The original listing price
  • Apartment age
  • Current market conditions (local and national)
  • Maintenance required
  • Upgrades or remodeling
  • Apartment square footage
  • Building and community amenities
  • Pet policy
  • Floor and access
  • And more

One great thing about apartments is that there are likely many units, just like your own, down the hall or in surrounding areas. With this in mind, it is usually not difficult to obtain recent property appraisals and transactions for apartments similar to yours.

Taxes Paid on the Sale of an Apartment

Now before you start counting your chickens before they hatch, it is important to remember that significant taxes are paid on the sale of an apartment in the United States. This is especially true if your property has appreciated in value considerably since the time you bought it. Across the US, the following are usually paid on the sale of an apartment.

  • Federal Income Taxes
  • Sales Taxes
  • Local Taxes
  • And More

In the eyes of the IRS, the total taxes paid when selling your own home is actually a bit different than other real estate transactions. If your apartment was your primary residence then capital gains taxes are only applied on sales of over $500,000.

Of course, as the cost of living in condensed cities increases on the coasts and throughout the country, more and more apartments are sold at over half of a million dollars. For these transactions, capital gains taxes are applied which can typically be 10’s of thousands of dollars.

Selling Apartments with a 1031 Exchange

With premium apartment sales, capital gains taxes are partially or completely eliminated by using a 1031 exchange. A 1031 exchange is an official IRS process that allows smart investors to essentially “trade” their old property for another investment. If the new purchase is of greater or equal value than the sold apartment, capital gains taxes are completely eliminated.

Apartments Like-Kind Properties

In a 1031 exchange, new property purchases must be of “like-kind” property in order to qualify for the tax savings. Apartments are viewed just like most other physical properties and can be exchanged for:

  • Homes
  • Condos
  • Farms
  • Trailer Parks
  • Mineral Rights and Royalties
  • And more

Apartments 1031 Exchange Timeline

The day after your apartment is sold, the clock starts ticking on your eligibility for a 1031 exchange. In total, taxpayers have 180 days to replace an apartment with a new property in order to qualify for capital gains deferral. Before you kick your feet up for five months, it is important to note that one eligible property must be identified (but not necessarily purchased) within 45 days of the apartment sale.

Why Purchase Mineral Rights and Royalties?

For a lot of parent owners, mineral rights and royalties may be a foreign concept, as they are not typically included in apartment deeds. Rather, like on many other kinds of property mineral rights are available to purchase in order to claim the subsurface resources of a particular plot of land.

With active mineral rights, oil and gas companies lease this land to survey, extract and sell resources like oil, gas, coal, and more. By owning the mineral rights, you are then entitled to a fixed share percentage of each month’s sales, known as a mineral royalty payment.

Knowing this, it is very easy to establish a great passive income stream with the purchase of high-valued mineral rights. If this sounds like something of interest, we highly recommend speaking to a 1031 intermediary that specializes in the field.

Conclusion

At the end of the day, selling your apartment opens a lot more doors than just your former entranceway. By utilizing a 1031 exchange, former apartment owners can save a tremendous amount of money on capital gains taxes that would have been otherwise applied.

Unless finding a new roof over your head is your number one priority, then an investment in mineral rights and royalties is a potentially great way to benefit from the sale of an apartment.

1031 exchange gas stations

1031 Exchange Gas Stations [Ultimate Guide]

For first time sellers and experienced investors, gas stations can be purchased, improved, and sold for tremendous profit margins. With more and more cars on the road every year, gas stations are a staple of the American road system, providing food and fuel to travelers on roads both large and small.

Today, the sale of a gas station can be maximized by using a 1031 exchange. In trading for another property, capital gains taxes are deferred and more of the proceeds from a gas station sale can be used for reinvestment.

In this article, we will explain and outline the steps that need to be taken in order to 1031 exchange gas stations. In doing so, we will also make the case for mineral rights and royalties as one of the best possible ways to continue to benefit from the sale.

How to Sell A Gas Station

In order to 1031 exchange gas station, you must first obviously sell it. Selling gas is easy, but selling a gas station isn’t as so. Gas stations are a highly specialized kind of property unlike any other commercial real estate of its kind. Knowing this, the process of selling a gas station may be more laborious than you originally anticipated.

With that being said, gas stations are located practically everywhere across the country, as nearly every town in America is home to one or two. This familiarity makes the sale of a gas station more likely among investors looking to buy a property type that has stood the test of time.

For the most part, gas stations are sold with the help of a specialized, commercial real estate agent. This is most commonly true in big cities and towns. However, in highway communities across the country, a gas station may likely be one of the highest valued properties in the area.

Determining the Value of A Gas Station

Today, gas stations are typically sold in online listings or through word of mouth. Gas stations are sold on the open market and can only truly be valued by the highest purchasing bid. Although some abandoned facilities will go to auction, typically gas stations are sold after negotiations of a predetermined sales price.
As the sum of many different parts, the total value of a gas station can be determined by summing the following considerations:

  • Property size and condition
  • Number of buildings, size, and conditions
  • Number of filling stations
  • Bonus facilities (car wash, air pumps, etc.)
  • Branded affiliations (both for store and gas pumps)
  • Business records, profit and loss statements, etc.
  • Transferable employees
  • Current supply chain relationships
  • And more

So clearly, there are a ton of things to consider before putting a price on your property. If possible, locate the properties appraisal records, as well as the previous listing prices for other gas stations in the local vicinity.

Taxes Paid on the Selling Gas Stations

As both a business and a property, gas stations are often sold for significant amounts of money. Of course, for every dollar that a gas station is sold for, more taxes are applied to the sale by local and federal governments. When selling a gas station, the following are usually applied:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More

1031 Exchange Gas Stations

Of course, savvy investors trying to pinch every penny from their sale are well aware that 1031 exchanging gas stations can partially or completely eliminate capital income taxes paid on the sale of a gas station. By “trading-up,” for a new property, the IRS allows for capital gains taxes to be avoided if the same taxpayer simply reinvests their money elsewhere.

Gas Station Like-Kind Properties

Of course, you can’t use a 1031 exchange to trade just anything for a gas station. Instead, the property must be considered to be “like-kind” in the eyes of the IRS. Thankfully, most physical assets qualify as similar enough to gas stations in order to qualify for a 1031 exchange.

For instance, the following can be considered like-kind properties:

  • Strip malls and shopping centers
  • Trailer parks
  • Hotels
  • Water and ditch rights
  • Mineral rights and royalties
  • Farms
  • Office buildings
  • And more

1031 Exchange Gas Station – Timeline

Gas stations can take a considerable amount of time to sell, so it is a good idea to consider what you might use a 1031 exchange to purchase even before you are headed to a large check. This is especially true because at least one property must be identified in the first 45 days after the sale of a gas station. Beyond that, taxpayers have just 180 days, or roughly 6 months to purchase a new property in a 1031 gas station exchange.

Failure to meet deadlines and file paperwork on time is typically not forgiven by the IRS. With this in mind, it is strongly recommended to work with a 1031 exchange intermediary when maximizing the reinvestment of your funds.

For additional requirements, please see our 1031 Exchange Rules and Requirements Page.

What to 1031 Exchange Gas Stations For?

Mineral rights and royalties are a highly profitable venture that many American investors are still unaware of. The truth is, for the past 100 years, mineral rights owners have been leasing their subsurface property to oil and gas companies in exchange for sizable mineral royalty checks.

In a sense, selling a gas station and purchasing mineral rights is kind of like selling your house and buying a quarry that exports building materials. By going “back to the source,” an investment in mineral rights is a largely passive income stream that does not require the maintenance and upkeep as a gas station does.

Conclusion

In conclusion, gas stations are highly valuable, which is why it is important to maximize the proceeds when selling one on the open market. By utilizing a 1031 gas station exchange it is possible to defer tens of thousands of dollars in capital gains taxes that would have been otherwise paid. Although the choice is yours to reinvest in any kind of property, mineral rights and royalties are an easy way to stay profiting in the oil industry with significantly less time and effort.