Guides on how to perform 1031 exchanges with specific types of property or business. Check our 1031 Guide today.

1031 exchange hotels

Owning a hotel or a motel is one of the most interesting property types in a portfolio. This is from a business standpoint. A highly profitable daily rate can lead to enormous cash flow. On the other hand, uncontrollable influences may lead to a hotel’s or motel’s ultimate demise.

Have you decided that your hotel has had its last facelift? Do you have an interest in selling your property to invest your money elsewhere? A 1031 exchange can be utilized to eliminate capital gains tax when reinvesting in a new property. This is for both hotel and motel sales.

Mineral rights and royalties rarely have as much upkeep or attention required to benefit from the investment. This is unlike hotels and motels, 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.  Hotels and motels commonly sit on the open market for months and even years on end. This is common in communities with dwindling populations or tourism,

Today, most hotels and motels are sellable with the help of a commercial real estate agent. In some cases, the hotel’s property you can find 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

Are you using the help of a professional third party or not? It’s always a good idea to know the approximate value of your hotel. This is when trying to sell it in the open market. As most hotels are sellable 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

It may be challenging to tally all of your assets into one magic number. Hotels and motels are sellable 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, capital gains taxes are deferrable 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 considerable as both property and business entities. This allows them to be go through the exchange 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 considerable as a great opportunity for return on investment.

1031 Exchange Hospital Equipment

Hospital equipment can be very expensive, as the business of saving lives does not come cheap. Are you operating a hospital? How about an 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. Have you heard of a 1031 Exchange Hospital Equipment?

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

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 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 large 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

With large hospital equipment sales, capital gains taxes may also be applied. This is applicable 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 considerable to be personal property. It serves a function for both businesses and individuals. With this wide spectrum of consideration in mind, hospital equipment is a considerable “like-kind” properties to a number of different assets.

While hospital equipment is not exchangeable 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 is exchangeable for single-family homes or apartments. Most private sellers are not selling hospital equipment at such high values. Now, 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. This is for a valid 1031 exchange to transpire. Remember that at least one property must be identifiable within 45 days of the sale of hospital equipment. This is inclusive in the six-month period in mind.

How do 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?

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 are purchasable to acquire a portion of or the entire property’s subsurface.

A leased oil and gas company handles all of the onsite operations from exploring to extracting. This starts with marketing and selling the natural resources of the property. A mineral rights owner will have a portion of each month’s sales. These 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 on 1031 Exchange Hospital Equipment

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

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

If you have further questions, feel free to reach out to us here.

1031 Exchange Apartment

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. Introducing the 1031 Exchange Apartment opportunity.

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 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 important 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 determinable 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 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. They are not typically included in apartment deeds. Rather, like on many other kinds of property mineral rights are available to purchase. It is 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. For example, are on capital gains taxes that would have been otherwise applied.

Is finding a new roof over your head not your number one priority? Then an investment in mineral rights and royalties is a potentially great opportunity. It is a way to benefit from the sale of an apartment.

If you have further questions related to 1031 Exchange Apartments, feel free to reach out to us here.

1031 exchange gas stations

For first-time sellers and experienced investors, gas stations can be purchased, improved, and sold for tremendous profit margins. There are more and more cars on the road every year. That is the reason why gas stations are a staple of the American road system. It is 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 deferrable and more of the proceeds from a gas station sale are useable for reinvestment. In this article, we will explain and outline the steps that need to be taken in order to 1031 exchange gas stations. With that, we will also make the case for mineral rights and royalties. They are 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, gas stations are located practically everywhere across the country. It is 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 highly profitable ventures 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.

1031 Exchange Convenient Stores

In American cities large and small, convenience stores are an essential part of the consumer ecosystem. With the right location, a convenience store can be a highly profitable business whether as the landlord or general manager. With that said, favorable real estate and existing customer flow can make convenient stores an incredibly hot commodity. Are you a first-time investor and seasoned property owner? The proceeds of the sale of a convenience store are stretchable by using a 1031 Exchange Convenient Stores

With a 1031 exchange, convenience stores are exchangeable for another property. This is to avoid paying any capital gains tax from the original sale. In today’s energy market, there are few better ways to reinvest in the sale of a convenience store.

In this article, we will detail the steps to take when selling a convenience store. This is through using a 1031 exchange, and purchasing profitable mineral rights and royalties.

How to Sell A Convenience Store

First things first, let’s sell your convenience store. Convenience stores are sellable and tradeable on the open market just like any other kind of property. With this in mind, convenience stores are sellable by using local ads, online listings, and real estate brokers.

Determining the Value of Your Convenience Store

The great thing about convenience stores is that they can be found all over the world. In the United States, it is extremely easy to locate property records and appraisal values of convenience stores in and around most areas of the country. With this in mind, determining the value of your convenience store is best represented by comparing it to similar properties on the market today.

The total value of a convenience store can be determined by factoring in the following considerations:

  • Property Location (Foot or Car Traffic)
  • Property Size
  • Number of Parking Spaces
  • Existing Structures
  • Number of Gasoline Pumps
  • Current Operations, Partnerships, and Supply Chains
  • Franchise Agreements
  • And more

When it comes to convenience, location is almost everything. Beyond that, the value of a convenience store is largely dependent on the conditions of the current facilities and business operations.

Taxes Paid on the Sale of a Convenience Store

Whenever you put a price tag on your convenience store, don’t count your chickens before they hatch. It is important to remember that a considerable amount of taxes are paid on the sale of a convenience store. This includes:

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

With these fees factored in, you can expect to pay as much as 40% of the sale price in total taxes. However, as we mentioned before, capital gains taxes can be partially or completely avoided by utilizing a 1031 exchange.

Selling Your Convenience Store with a 1031 Exchange

With a 1031 exchange, the purchase of a like-kind property makes it possible to “trade” a convenience store and avoid capital gains taxes. As there are many strict rules and timelines to meet, it is recommendable to utilize a 1031 intermediary when initiating an exchange.

Like-Kind Properties for the Sale of a Convenience Store in a 1031 Exchange

Under the all-knowing power of the Internal Revenue Service (IRS), most properties can be considered similar enough to a convenience store that a 1031 exchange can be used. For example, capital gains taxes will be avoided if you use a 1031 exchange to purchase

  • Mineral Rights and Royalties
  • Land
  • Water and Ditch Rights
  • Homes
  • Apartment Buildings
  • Farms
  • And more.

Timeline for Using a 1031 Exchange after Selling a Convenience Store

After you sell a convenience store, you have 45 days to identify at least one property considerable as a 1031 exchange. Although you do not necessarily have to purchase the first property, only 3 total properties are identifiable regardless of their value. Purchase must be made within 180 days of the sale in order for a 1031 exchange to be valid.

How to Purchase Mineral Rights and Royalties

More than any other like-kind property, we strongly recommend looking into the purchase of mineral rights and royalties after the sale of a convenience store. If you are unfamiliar, mineral rights are the property rights of a land’s subsurface, which entitles owners to lease or sell the value resources found within the earth’s crust.

Why are mineral rights a good investment?

Active mineral rights allow for property owners to receive monthly mineral royalty checks as a fixed percentage of the sale of oil gas or other natural resources. Even if a property is not currently not under drilling, mineral rights retain their value if the property has the potential to undergo excavation in the future.

How to Maximize Your 1031 Exchange with Mineral Rights

If you’re new to mineral rights and royalties, we recommend that you speak with a 1031 intermediary that specializes in the subject. Whereas mineral rights transactions are not a requirement to be a public record, determining the current and potential future value of mineral rights can be difficult for first-time investors.

Conclusion on 1031 Exchange Convenient Stores

At the end of the day, convenience store sales can lead to huge lump sums of cash. The best way to retain, reinvest, and profit from that cash is by using the 1031 exchange to avoid capital gains taxes.

Mineral rights and royalties are the perfect, passive reinvestment for former convenience store owners. With the right property and oil and gas lease, owning the parietal or total mineral rights of a property can lead to a steady stream of revenue in the form of mineral royalties.

For more information on the timelines, laws, and process of filing a 1031 exchange, feel free to read our full list of rules and regulations.

Also if you have further questions about 1031 Exchange Convenient Stores, feel free to reach out to us here.

How long Do You have to Hold a 1031 Exchange Property

The sky’s the limit when you have land. With the proper zoning, construction team, and dream, anything can be accomplished when you pick the right property. With this in mind, the land is a hot commodity all across the country. Are you planning to develop the land? Attractive lots are sure to pique the interest of buyers with dreams of their own. This is of the best ways to maximize the return on investment. Usually after selling land is to use a 1031 exchange. Today, exchanges can be used to purchase highly profitable mineral rights. This can lead to a steady stream of mineral royalties. In this article, we will explain all of the steps necessary on how long do you have to hold a 1031 exchange property and to 1031 exchange land for mineral rights.

How to Sell Land

This may come as a surprise, but selling land is actually quite a bit different than selling a home. Houses are sold with the land beneath them. With that, the market for empty lots is a lot different than traditional real estate.

More often than not, the sale of land takes considerably longer than the sale of homes, buildings, and other kinds of real estate. With that said, landowners are allowed to sell their land on the open market, using any and every sales and marketing technique that they choose. Most commonly land sales are made through:

  • Yard Signs
  • Online Listings
  • Speciality Realtors
  • Word of Mouth
  • And more

Determining the Value of Your Land

The first step to selling your land is putting a price on it. Unless you are “pricing to sell,” it is a critical mistake to undersell the value of your land. More often than not, property prices will rise in areas with sustained development.

The value of a lot of lands is determined by:

  • The Size (Acreage)
  • The Location
  • Accessibility
  • Existing Structures
  • Zoning Laws and Requirements
  • Property Taxes
  • And More

Thankfully, most newly sold or developed land is usually neighbored by similar plots. In your city and across the country, it is very easy to check online listings in order to see the approximate value of similar properties. Finding an existing plot for sale that has the same features as your land is a good way to quickly see a reasonable value to price your property.

Taxes Paid on the Sale of a Land

No matter how much you sell your land for, there will still be at least some taxes taken from the sale and given to local and federal governments. Although it varies greatly between areas of the country, most people pay the following taxes when selling a piece of land:

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

Here, the difference between land and a home is critical. Whereas selling your home will likely exempt you from paying capital gains tax, this is only because a special rule is made for selling the property that you live on. In the case of land or a vacant lot, more often than not, a capital gains tax is imposed.

How to 1031 Exchange Land and How long Do You have to Hold a 1031 exchange Property

With a 1031 land exchange, paying some or all of the capital gains tax imposed on the sale of a lot of land can be completely avoided. A 1031 exchange is an IRS-designated investment strategy in which selling property then quickly buying a similar property allows investors to be exempt from paying capital gains taxes.

Like-Kind Properties for 1031 Land Exchange

A 1031 exchange gets its name from “exchanging” the sale of a property for another one of “like-kind.” Under the laws imposed by the IRS, land is a fairly easy to define property, which shares the features and investment potential with many other like-kind purchases.

Like-kind properties for 1031 land exchange include:

  • Mineral Rights
  • Homes and Apartments
  • Malls and Strip Centers
  • Trailer Parks
  • Water and Ditch Rights
  • And More

1031 Land Exchange – Timeline

Even before you sell your land, you may want to begin thinking about the like-kind properties that you would like to purchase. Because the sale of land can take a considerable amount of time, knowing the direction you would like to take with your investment is extremely important once the land is sold and 1031 timelines must be met.

To start, the IRS requires that at least one like-kind property must be identified within 45 days of the sale of a piece of land. After that, the new property must be purchased within 180 days of the sale in order to qualify for a valid 1031 land exchange.

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

Using an Intermediary to 1031 Exchange Land

A 1031 exchange intermediary is strongly recommended for both first time and experienced investors when selling land. Utilizing the resources and knowledge of a professional will not only help 1031 timelines be met, but will also likely maximize your investment.

How to Purchase Mineral Rights and Royalties?

With mineral rights and royalties, former landowners are able to reinvest their money into the subsurface rights of a different property. In doing so, oil and gas companies leasing the land care are required to send a mineral royalty check as a fixed percentage of the monthly sale of oil, gas, or other natural resources from the property.

Mineral rights may be intimidating to first-time buyers, as the property may never even be visited by the investor themselves. Speaking to a professional about mineral rights and royalties is strongly advised in order to best explore your options.

Why 1031 Exchange Land for Mineral Rights?

The sale of land can be best reinvested by 1031 land exchange for mineral rights to avoid capital gains taxes. Even if it takes a few years to sell your land, quickly identifying mineral rights and royalties and purchasing them with a 1031 exchange can be a highly profitable venture.

1031 exchange building

Commercial buildings come in all shapes and sizes. Have you seen towering downtown offices? How about fast-food restaurants? Commercial buildings can take up the majority of any town’s business center.

In most cases, commercial buildings are leased to paying tenants. However, when things go awry (or a global pandemic hits), many building owners find themself tired of finding renters. This is where they start looking to sell their property.

Today, buildings can be sold at a tremendous value, which usually means considerable taxes will be paid on the sale. Thankfully, some or all of the capital gains taxes can be deferred by using a 1031 exchange.

In this article, we will outline the steps it takes to 1031 exchange buildings. After exploring potential reinvestment options, we will make the case for mineral rights and royalties. This can bring tremendous value to an investment portfolio.

How to Sell A Commercial Building

In order to 1031 exchange building, you must first obviously sell it. Think back to how you purchased your property. Chances are that things haven’t changed in the way this step of the process is done. Commercial building sales have been commonplace for over a century, so there are many systems in place to help you.

Many real estate websites have specifically designated commercial building sections. This includes for independent buyers to pursue and purchase. But more often than not, most of today’s buyers and sellers will use a commercial real estate agent. Do you know what can make the process of selling a building easy and painless? Having someone who knows the market, has connections, and understands your property.

Determining the Value of A Building

Whether you are going out on your own or just checking to see the validity of your broker’s claim, you must first determine the value of your building. This is before putting it on the open market. Commercial buildings have a ton of factors that determine their value, and therefore have a wide range of price points across the country.

All in all, the value of a building is largely determined by:

  • Building Size (Sq footage, number of floors, etc)
  • Building Condition (need for repairs)
  • Special Features (energy efficiency, gardens, etc.)
  • Current Tenant Status (single, multi, none, etc.)
  • Property Size
  • District and property taxes
  • And more

In most cases, it is fairly easy to source the publicly available records of your commercial building in order to double-check the value you purchased it before, as well as its history. To get an idea of market trends, it is also commonplace for building owners to check the value of similar-sized buildings in the area. Although they are similar markets, the value of commercial real estate may not be impacted by local residential rates.

Taxes Paid on the Selling Buildings

Once a building is sold, a considerable amount of taxes are paid to local and federal governments. The total amount of taxes applied to a building sale is largely dependent on the dollar amount and property location and zoning. Around the country, the following are generally paid on building sales:

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

As the numbers add up, most investors try to find ways in order to limit the amount of tax paid and maximize the return on the sale. As we mentioned above, a 1031 exchange is one of the best ways to do so, as it can be used to narrowly avoid hefty capital gains taxes.

1031 Exchange Buildings

Whenever you sell your building, the clock begins ticking on your eligibility for a 1031 exchange. As it is called an “exchange,” IRS tax code 1031 tells us that capital gains taxes can be deferred if the property is replaced with another, similar property.

In order to do so, paperwork must be filed and deadlines must be met. As IRS processes can be laborious and painstaking, it is strongly recommended that investors work with a 1031 exchange intermediary to make sure everything goes as planned.

Buildings Like-Kind Properties

As commercial buildings are one of the most common types of property in the United States, they can be sold and exchanged for a large variety of new purchases. The following can be purchased with a 1031 exchange after selling a building:

  • Single and Multi-Family Homes
  • Trailer Parks
  • Malls and Strip-Malls
  • Farms & Land
  • Water and Ditch Rights
  • Mineral Rights and Royalties
  • And Many More

1031 Exchange Buildings – Timeline

To successfully complete a 1031 building exchange, new like-kind properties must be purchased within 180s of the sale of a building. Don’t wait until it is too late, however, because at least one reasonable property must be identified within 45 days. Commercial buildings can spend a lot of time on the market, so research can be done on reinvestments even before it is officially sold.

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

What to 1031 Exchange Buildings For

Mineral rights and royalties are quite different from buildings, however, investors in the United States have been profiting off of subsurface rights for over a century. Mineral rights can be leased to oil and gas companies, just as commercial buildings can be leased to tenants. The key difference here is that every month an oil and gas company successfully extracts and sells natural resources, you are entitled to a fixed percentage of the profits as the mineral rights owner. With this in mind, a passive income stream is born that rarely requires your upkeep.

Conclusion

Ultimately, commercial buildings are a sound investment as society will always have the need for office space, dining capacity, and so much more. As portfolios diversify and buildings are sold for tremendous amounts of money, mineral rights and royalties are among the best possible reinvestments in today’s market.

1031 Exchange Parking Lots

They paved paradise and put up a parking lot. Then you bought it. Have you heard about 1031 Exchange Parking Lots?

Parking lots are a great way to earn relatively passive income. With a good location and enough space for plenty of cars, parking lots can be a very profitable venture.

With this in mind, selling a parking lot can lead to an enormous cash flow. Today, one of the best ways to reinvest this money is by using a 1031 exchange.

With a 1031 exchange, you can turn the earnings from your parking lot. It is into another great passive income stream: mineral rights in royalties.

In this article, we will outline how to sell your parking lot and use a 1031 exchange to earn the most from mineral rights and oil and gas royalty payments.

How to Sell A Parking Lot

First, let’s sell your parking lot. As a relatively simple operation, small business owners and first-time entrepreneurs may be very interested in purchasing your lot. Of course, there are a few different reasons someone may want to buy a parking lot. These include:

  • Parking for Local Businesses or Apartment Buildings
  • Daily Rates / Hourly Parking
  • Event Parking (Nearby Stadiums or Venues)
  • Demolitions and Land Repurposing
  • And more.

With this in mind, you have the option of selling your parking lot to a neighboring person or business as well as individual owners regardless of their location. If you have a parking lot downtown in a city, chances are that people have actually been approaching you with interest in the land.

Determining the Value of Your Parking Lot

Now before you sell to the first interested party, it is a good idea to get a ballpark estimate on the approximate value of your parking lot. To figure this out, take a look at online resources and local government records to see the property’s history as well as the history of similar lots in your area.
Parking lots come in all shapes and sizes, but their value is largely determined by these factors:

  • Size Of Land
  • Number of Levels (Garages)
  • Existing Structures (Tollbooth, etc.)
  • Location
  • Constructions and Maintenance History
  • Traffic / Current Tenants
  • And More

If you can identify a recent parking lot sale that shares some of these similar traits, that will give you an approximate value for your parking lot. With that in mind, your property is only as valuable as someone else is willing to pay for it.

Taxes Paid on the Selling Parking Lots

After you sell your parking lot, there will likely be a large sum of money headed in your direction. Unfortunately, federal and local governments take their share from your sale. Taxes paid on the sale of a parking lot include:

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

Selling Parking Lots with a 1031 Exchange

If you have earned enough money in your tax bracket to constitute a capital gains tax on the sale of a parking lot, this can be avoided if you purchase a new property with a 1031 exchange.

A 1031 exchange eliminates capital gains taxes paid on your income, so long as the money is reinvested in a similar or more expensive “like kind” property.

Parking Lot Like Kind Properties

In the eyes of the all powerful IRS, there are many properties that can be considered similar enough to a parking lot for use in a 1031 exchange. After all, a parking lot is essentially just an ordinary piece of private property that can often be repurposed and rezoned without much trouble.

Parking Lots can be 1031 exchange into:

  • Mineral Rights and Royalties
  • Apartment Buildings
  • Malls and Strip Centers
  • Golf Courses
  • Homes
  • Trailer Parks
  • And More

Selling Parking Lots – 1031 Exchange Timeline

After you sell your parking lot, there is a 45 day window to identify your first like-kind property for a 1031 exchange. Failure to do so will null your chances of avoiding capital gains taxes.

Thankfully, the first identified property does not have to be the one you purchase. 2 more properties can be identified regardless of value. After 180 days, the new property must be purchased in order to qualify for a 1031 exchange.

1031 Exchange Intermediaries for Selling A Parking Lot

A 1301 exchange intermediary is highly recommended in order to meet deadlines, file proper paperwork, and get the best overall reinvestment after selling a parking lot. It also is extremely helpful to hire an expert in the industry in which you are hoping to purchase a new property.

Why Purchase Mineral Rights?

Mineral rights are similar to parking lots, but perform at a much larger scale. Whereas parking lots can lead to monthly tenant payments, active mineral rights can lead to large monthly mineral royalty payments.

With mineral rights, you have the opportunity to earn a fixed percentage of the sale of oil, gas, or any other valuable natural resource as it is found, extracted and sold.

How to Maximize Your 1031 Exchange with Mineral Rights

Like parking lots, mineral rights come in all shapes and sizes. If you are new to the concept, it is always recommended to speak to a mineral expert before signing into an oil and gas lease or mineral rights contract.
Ideally, you will want to buy mineral rights that are either active or soon to be active. When this is the case, you will immediately begin to receive oil or gas royalty payments throughout the life of the operation.

Conclusion

At the end of the day, parking lots are a good investment, but selling yours can pave the way for higher earnings with mineral rights. As oil and gas become more and more valuable with increased population and resource depletion, owning mineral rights is one of the best ways to invest your money from the sale of a parking lot.

If you have further questions related to the topic of 1031 Exchange Parking Lots, feel free to reach out to us here.

Condominiums, or simply “condos,” are a great way to purchase property to live in, rent out, or resell. Sort of halfway between an apartment and a home, condominiums make for a great living situation for many people.

With that, the sale of a condo is likely to flood former owners with a large sum of cash. For first-time flippers and experienced investors, using a 1031 exchange is a great way to get the most out of your sale with a smart reinvestment.

In this article we will detail everything there is to know about 1031 exchange condominiums, and why mineral rights and royalties are the perfect property upgrade.

How to Sell A Condominium

Do you remember when you bought your condominium? It was pretty easy, right?

Well, good news, selling a condominium is usually just as simple. Although we’ve all heard our fair share of property nightmare stories, condominium real estate exchanges are usually fairly straightforward and easy to navigate.

So long as there is buyers’ interest, condos can be sellable in just about every way imaginable. Most commonly, this includes:

  • Hiring a Realtor to Market the Home
  • Selling By Owner
  • Yard Signs
  • Online Listings
  • Newspaper Ads
  • Word of Mouth, etc.
  • Reselling to the Builder
  • Gifting or Bequeathing to Friends and Family

Determining the Value of Your Condominium

The great thing about condominiums is that there are so many similar properties surrounding each and every one of them. Finding the value of your condominium may be as easy as knocking on your new neighbor’s door and asking how much they paid.

Of course, condominium value is also impacted by many individual variables including:

  • Number of Previous Owners
  • Pet History
  • General Condition
  • Appliance Upgrades
  • Number of Units
  • Community Amenities
  • Market Fluctuation
  • And more

In general, condominiums follow normal real estate market trends. In booming areas, value can fluctuate just as in cities with lowering populations. For long-term owners, a condominium is usually sold at a similar or greater price than it was purchased.

Taxes Paid on the Selling Condominiums

Even if you are selling your condo without the help of a realtor, accountant, or broker, you will still have to pay taxes on the money earned from the sale. Although the percentage of the gross amount varies by region, state, and city, most people pay the following on the sale of a condominium:

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

Although most people say that the only two things that are certain in life are death and takes, it is possible to avoid some taxation with smart money management. You may not be cheating death, but a 1031 exchange can be used to reinvest the money from the sale of a condominium into another profitable property.

In doing so, you can eliminate all of the Capital Gains Taxes that you would have otherwise paid to the IRS that calendar year.

1031 Exchange Condominiums

1031 exchanging condominiums is very easy. However, it does take a considerable amount of effort and careful attention to detail.

If you would rather save time and possibly earn more on a 1031 exchange investment, there are many industry experts available to help identify similar properties, meet deadlines, and process legal documents.

Condominium Like-Kind Properties

First and foremost, a 1031 exchange gets its name from the requirement to “trade” a condominium sale for another property. The IRS permits most other land-based properties as “like-kind,” including:

  • Mineral Rights and Royalties
  • Parking Lots
  • Shopping Centers
  • Trailer Parks
  • Water and Ditch Rights
  • Apartments
  • Homes
  • Farmland
  • And More

1031 Condominium Exchange – Timeline

To start, you have 45 days to identify at least one reasonable like-kind property from the sale of your condo. By reasonable, the law dictates that it should be not only like kind, but also of similar or greater value.
1031 exchange qualification expires after 180 days if a new property is not purchased. After 180 days, capital gains taxes are no longer withheld from the sale of the condominium. A maximum of 3 like-kind properties can be identified without having to factor in their value.

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

What to 1031 Exchange Condominiums For

Mineral rights are the total or partial ownership of the subsurface of a plot of land. In the United States, they are available to purchase just as any other property like condos, farms, and homes.

If your dreams of renting the condo out to paying tenants have not matched your expectations, mineral rights are another great way to earn monthly income from owning property.

Each month, leased oil and gas companies are able to extract, process, and sell oil and gas from the mineral rights property that you own. In most cases, you may never even see the operation, however, a monthly oil and gas royalty check will be paid to your name as a fixed percentage of the resource sales.

How to Maximize Your 1031 Condominium Exchange

If you’ve spent too much time in your condo in the city, mineral rights may be a new concept for your investment portfolio. However, states like Texas, Colorado, Pennsylvania, and more contain highly valued mineral rights properties that are both active and waiting for resource extraction.

Mineral rights are valued on their estimated remaining reserve capacity as well as the percentage ownership as granted by the contract.

Conclusion

If you’re selling your condo, consider using a 1031 condominium exchange to purchase mineral rights and oil and gas royalties. In doing so, your reinvestment will not only eliminate capital gains taxes (potentially $1,000’s of dollars) but may also lead to steady monthly income from the sale of natural resources.

In many regions of the United States, water and ditch rights are becoming increasingly valuable. If you own property with flowing water, then chances are your water and ditch rights are sellable for a tremendous capital gain.

One of the best ways to reinvest the sale of water and ditch rights is through a 1031 exchange. By eliminating capital gains tax, you can then reinvest your sale in like-kind property.

More than anything, mineral rights, and royalties are the perfect reinvestment for the sale of water and ditch rights.

What are Water and Ditch Rights?

Water rights, also known as ditch rights or water ditch rights, refer to the private ownership of a waterway for performing “reasonably necessary” operations.

Most water and ditch rights are useable for irrigation. It has limits set on how much of the water can are divertible for agriculture. It includes diversion for water treatment and hydroelectric purposes.

How to Sell Water and Ditch Rights

In many states throughout the country, want and ditch rights are sellable as private property. This also infers that they gift and or trade it to a new owner. It is just like any other property that is transferrable in the United States.

In a split estate, water rights can be sold as a completely separate entity from the land’s property. There were 90 independent water rights sales in Colorado which totaled to about $57 million of sales in 2015 alone. In line with this, take note of the 1031 exchange Colorado guidelines so that you could save more on taxes.

Determining the Value of Water and Ditch Rights

So clearly, water rights can be very valuable. Now before you sell your water or ditch rights, you should get a ballpark idea of how much they may be worth before speaking to an industry professional.

Water and ditch rights are evaluated for the following criteria:

  1. Location
  2. Approximate Volume of Water (Measured in Acre-Feet)
  3. History of Similar Sales
  4. Reliability of Water Source
  5. Logistics and Property Considerations
  6. Potential Income Streams From the Water
  7. Potential Replacement Costs

More than anything, water and ditch rights are usually valued at prices that coincide with similar water rights sales of the past. To determine the value of your water rights, contact your local government land management office to learn about the history of water and ditch sales in your area.

Taxes Paid on Selling Water and Ditch Rights

Of course, no matter how much money you can make from the sale of water or ditch rights, taxes will always still be applied. Water rights sales across the country are usually taxed with the following ordinances:

  1. Federal Income Taxes
  2. Capital Gains Taxes
  3. Sales Taxes
  4. Local Taxes

As we mentioned above, capital gains taxes can be eliminated from the sale of water rights, ditch rights, or water and ditch rights by using a 1031 exchange. Property owners should also keep track of potential deductions throughout the process of the sale.

Combining these two methods is the best way to get the most out of your investment portfolio.

Selling Water and Ditch Rights with a 1031 Exchange

Once you’ve found the highest paying bidder and sold your water and ditch rights, then you can start celebrating. After the party, it’s time to get to work, as there is a lot of paperwork and a few reasonably tight deadlines for utilizing a 1031 exchange.

Water and Ditch Rights Like-Kind Properties

The first step in using a 1031 exchange is identifying like-kind properties that you will “exchange” for the sale of your water rights. Water and ditch rights are to be ordinary property rights and therefore exchangeable for many different like-kind properties.

This includes:

  1. Mineral Rights and Royalties
  2. Mineral Interests
  3. Farms
  4. Property
  5. Businesses
  6. Buildings

Water and Ditch Rights 1031 Exchange Timelines

Unless you have been eyeing up like-kind properties for months, then you will need to begin looking for new assets as soon as you sell your water and ditch rights. The IRS allows for 45 days for the first like-kind property to be identified.

That’s only a month and a half! Thankfully you are able to identify up to 3 properties, regardless of total value in the first 180 day period. At the end of this period, one property must be purchased by the same taxpayer in order to qualify for a 1031 exchange on the sale of water and ditch rights.

1031 Exchange Intermediaries for Selling Water and Ditch Rights

Clearly, timelines are tight and water and ditch rights can be highly valued transactions. For these reasons, it is always best to seek professional help when selling water and ditch rights as well as using a 1031 exchange.

In many ways, mineral rights are a great property that can be reinvested to create potentially large income streams.

Why Purchase Mineral Rights and Royalties?

Mineral rights refer to the ownership of the subsurface of a property, usually associated with the excavation of valuable resources. Mineral rights lead to mineral royalties, which are monthly payments derived from a fixed percentage of the sale of oil or gas.

How to Maximize Your 1031 Exchange with Mineral Rights

Using a 1031 exchange to purchase mineral rights is a potentially great idea. Just remember that you can only maximize it if you already identify the right property. After selling your water island ditch rights, it is recommendable to speak to a mineral rights expert. This is in order to identify the most valuable mineral rights or royalty properties available.

Conclusion

In conclusion, 1031 exchanges are one of the best ways to reinvest your income. This is from the sale of large properties such as water and ditch rights. By avoiding capital gains taxes, you can purchase equal or greater valued mineral rights. That way you can develop a steady income stream from the sale of valuable resources.

If you have further questions about the 1031 exchange, learn more here.