How to 1031 Exchange Condominiums into Mineral Rights & Royalties

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 being said, 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 you need to know about selling a condominium with a 1031 exchange, 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 are interested buyers, condos can be sold 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 condo 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.

Selling Condominiums with a 1031 Exchange

Selling a condominium with a 1031 exchange 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

Selling Condominiums – 1031 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 Echange Rules and Requirements Page.

Why Purchase Mineral Rights?

Mineral rights are the total or partial ownership of the subsurface of a plot of land. In the United States they are available t o 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 Exchange with Mineral Rights

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 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.

How to 1031 Exchange Water and Ditch Rights into Mineral Rights & Royalties

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 could be sold 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 a 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 used for irrigation, with limits set on how much of the water can be diverted for agricultural, water treatment and hydroelectric purposes.

How to Sell Water and Ditch Rights

In many states throughout the country, want and ditch rights can be sold as private property. This also infers that they can be gifted or traded to a new owner, just as any other property can be transferred in the United States.
In a split estate, water rights can be sold as a completely separate entity from the land’s property. In fact, there were 90 independent water rights sales in Colorado which totaled to about $57 million of sales in 2015 alone.

Determining the Value of Water and Ditch Rights

So clearly, water rights can be very valub. 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 ditrch rights are evaluated for the following criteria:

  • Location
  • Approximate Volume of Water (Measured in Acre-Feet)
  • History of Similar Sales
  • Reliability of Water Source
  • Logistics and Property Considerations
  • Potential Income Streams From the Water
  • 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:

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

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 for. Water and ditch rights are considered to be ordinary property rights and therefore can be exchanged for many different like kind properties.

This includes:

  • Mineral Rights and Royalties
  • Mineral Interests
  • Farms
  • Property
  • Businesses
  • Buildings
  • And more

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 which 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, but can only be maximized if the right property is identified. After selling your water island ditch rights, it is recommended to speak to a mineral rights expert 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 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 in order to develop a steady income stream from the sale of valuable resources.

How to 1031 Exchange Self Storage Facilities into Mineral Rights & Royalties

A self storage facility is a great way to both personally store your possessions as well earn passive income from renting out the space. However, if you are liquidating your assets, selling a self storage facility is a great way to both symbolically and physically let go of personal possessions.

1031 exchanges can be used to eliminate the capital gains tax on the sale of a self storage facility. Reinvestment in mineral rights and royalties are a great way to maximize the sale of your property with a similar asset without the majority of the work and upkeep.

In this article, we will first explore how to sell a self storage facility and use a 1031 exchange. In doing so, we hope to make it clear how well mineral rights and royalties can replace a self storage facility as a perfect addition to any investment portfolio.

How to Sell Your Self Storage Facilities

First things first, let’s sell your self storage facility. Whether you are selling a single or multi unit storage facility, valuable properties will likely be found by many potential buyers with the right marketing efforts.

Like homes and office buildings, self storage facilities can be sold just like any other property in the United States. Storage centers can also be traded, leased or bequeathed to another individual. Self storage facilities are often sold at a local and national levels to individuals, businesses, and other organizations.

Determining the Value of Your Self Storage Facilities

Self storage facilities are bought and sold constantly, so there are many public records that can be dug up in order to find the value of past sales. The best way to determine the value of your self storage facility would be to find the sale of a similar property in your county or state.

On case to case basis, self storage facilities are valued on their:

  • Size (Number of Units)
  • Capacity and Number of Current Tenants
  • Property History and Maintenance
  • Technology and Features (Keyless entry, air conditioning, etc.)
  • Location and Neighborhood
  • Security
  • Market Trends
  • And More

Everyone knows that the market fluctuates, and self storage facilities are not immune to this. By combining all of the factors above and looking for similar historic sales, you should be able to get a decent idea of the approximate value of your self storage facility.

Taxes Paid on the Selling Self Storage Facilities

It almost goes without saying, but not every penny of your sale is going to end up in your pockets. In fact, taxes of over 40% can even be applied to the sale of a self storage facility. Depending on your geographical location, you will likely pay:

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

Throughout the process of the sale, marketing, legal and process fees can all be used as a way to deduct the amount of tax dollars paid. Beyond this, exchanging your self storage facility for a new property of equal or great value is also a great way to maximize your sale.

Selling Self Storage Facilities with a 1031 Exchange

A 1031 exchange completely eliminates any capital gains received from the sale of a self storage facility. However, it is important to note that meeting strict timelines and completing lots of paperwork is required in order to officially file a 1031 exchange.

Self Storage Facilities Like Kind Properties

1031 exchanges are, well, “exchanges” that can be used to swap out one property for another. Under the eyes of the IRS, 1031 exchanges can only be used if the sold and purchased properties are considered to be “like kind.”

As they are no different than many private properties, self storage facilities can be exchanged for:

  • Mineral Rights and Royalties
  • Apartment Buildings
  • Shopping Malls and Strip Centers
  • Trailer Parks
  • Private Land
  • Hotels
  • Campgrounds
  • And More

Beyond these similar properties, it is also possible to exchange a self storage facility for a completely different kind of property like water and ditch rights. The only difference is that more rationalization may be necessary when it comes time to file taxes.

Self Storage Facilities 1031 Exchange Timeline

After selling a self storage facility, taxpayers have 180 days to purchase a like kind property to legally use a 1031 exchange to eliminate capital gains taxes.

Now before you sit back and do nothing for six months, it is very important to note that at least one reasonable property must be identified within 45 days of the sale. This property does not necessarily need to be the one that is purchased, but identification is necessary to keep timelines moving.

1031 Exchange Intermediaries for Selling A Self Storage Facilities

With timelines and paperwork piling up, it is always a good idea to speak to a 1031 exchange intermediary when selling a self storage facility. Working with someone through the sale, subsequent purchase, and exchange is the best way to make sure everything is done legally and for the highest potential value.

Why Purchase Mineral Rights and Royalties?

If you’ve never considered mineral rights as a part of your investment portfolio, then you may have been living under a rock. While you’re under there, why don’t you check for some oil or natural gas?

Joking aside, mineral rights create mineral royalties for the sale of a property’s natural resources. Mineral rights and royalties are a great investment in the United States as resource scarcity makes these properties increasingly valuable.

Conclusion

At the end of the day, you can do whatever you want with the capital that you gain from the sale of a self storage facility. In the United States, using a 1031 exchange to defer capital gains taxes and revineest in a like kind property is one of the best choices for American taxpayers.

With the acquisition of mineral rights and royalties, the sale of a self storage facility can result in a potentially large income stream for many productive years.

warehouses

How to 1031 Exchange Warehouses into Mineral Rights & Royalties

All across the country, warehouses lie on the outskirts of towns, cities, and rural areas. Warehouses are extremely functional for storing materials for companies, artists, communities, emergency materials, and so much more. Essentially, if something needs to be stored, there is a warehouse somewhere waiting for it.

Knowing this, many developers and investors choose to buy, build, and sell warehouses as high priced pieces of land and property. Selling a warehouse anywhere in the world often comes with a huge capital gain, and therefore many taxes.

With a 1031 exchange, capital gains taxes can be avoided when selling a warehouse and purchasing another property. Today, mineral rights and royalties can be purchased after the sale of a warehouse using a 1031 exchange. With this in mind, capital gains taxes are avoided, and a new potential income stream is born.
In this article, we will detail the steps to take when selling a warehouse, and using a 1031 exchange to secure mineral rights and royalties.

How to Sell A Warehouse

If you google “how to sell a warehouse,” unfortunately, most of the results are designed to help people trying to sell a warehouse in Grand Theft Auto 5. Digging a little deeper, it is actually easier to sell a warehouse than you might imagine.

Although the target market is a bit different, selling a warehouse is very similar to selling any other property. There are many online marketplaces designed specifically for property sales, many of which have filters for those looking specifically for warehouse space.

Determining the Value of A Warehouse

Whereas many warehouse owners lease sections of their space to multiple owners, the outright sale of a warehouse usually comes at a hefty sum. With this in mind, a warehouse is essentially the sum of all its physical and fiscal parts.

The value of a warehouse is determined by:

  • Warehouse Size
  • Warehouse Conditions
  • Property Size and Conditions
  • Access (Driveways, Garages, etc)
  • Current Tenants (if applicable)
  • Warehouse Type (Designed for cars, shipping, etc.)
  • And more
  • Thankfully, most warehouse properties across the country have publically available records of their value. Even if you are unable to see a property’s history for yourself, there is always the option to match the price value of your warehouse with similar properties in your area.

Taxes Paid on the Selling Warehouses

Before you cash that check, remember that there are considerable taxes to be paid after selling a warehouse. As the gross payout increases, so does the amount of money that you are equally required to pay local and national governments.

Depending on location, the following are usually paid on the sale of a warehouse:

  • Federal Income Taxes
  • Capital Gains Taxes (Long or Short Term)
  • Local Sales Taxes
  • State Taxes
  • Depreciation Recapture Taxes
  • And More

With a large price tag, capital gains taxes can be expected. However, as we mentioned above, a 1031 exchange can be used to avoid capital gains taxes on the sale of a warehouse.

Selling Warehouses with a 1031 Exchange

With a 1031 exchange, taxpayers can “trade-up” warehouses for a new property of equal or greater value in order to completely eliminate capital gains taxes. Deadlines must be met and paperwork must be processed, so we highly recommended working with a 1031 exchange intermediary to ensure a successful amendment to your taxes.

Warehouse Like-Kind Properties

Under the gaze of the IRS, most properties can be considered “like-kind” to warehouses. In a 1031 exchange, taxpayers can purchase any of the following after the sale of a warehouse for an elimination of capital gains taxes:

  • Other Commercial Buildings
  • Mineral Rights and Royalties
  • Homes and Apartment Buildings
  • Strip Malls and Stores
  • Trailer Parks
  • Golf Courses
  • And more

Warehouses 1031 Exchange Timeline

After you sell a warehouse, you are not given a whole lot of time to roll around in your money if you’d like to use a 1031 exchange. The IRS mandates that at least one reasonable property must be identified for purchase within 45 days of the sale.

Of course, this first property does not necessarily have to be the one used in the exchange. Up to 3 properties can be identified regardless of value and one must be purchased within 180 days of the sale for the 1031 exchange to be valid. With this in mind, it is always advised to have a rough idea of what you’ll be reinvesting in before the sale of your warehouse is finalized.

Why Purchase Mineral Rights and Royalties?

Mineral rights and royalties are usually not the first property that comes to mind when using a 1031 exchange in the sale of a warehouse. However, in the United States, mineral rights and royalties can be an extremely valuable part of any investment portfolio.

If you’re not familiar here’s how it works:

  • The acquisition of mineral rights allows you to own all or a portion of the subsurface of a property.
  • The land is leased to an oil and gas company that extracts and sells the land’s natural resources.
  • You receive mineral royalty payments as a fixed percentage of the sales designated by your mineral rights ownership.

How to Maximize Your 1031 Exchange with Mineral Rights

If you are planning to use an intermediary with your 1031 exchange, you have the opportunity to work with a specialist in any industry you choose to reinvest in. For mineral rights and royalties, industry jargon, complicated contracts, and lack of transparency can cause headaches for first-time investors. With this in mind, working with a specialist is always recommended.

Conclusion

Whether it was built to be sold or has already served its purpose, selling a warehouse is a big deal for property owners. With today’s laws and opportunities, using a 1031 exchange to purchase mineral rights after the sale of a warehouse is a great way to intelligently reinvest your income to avoid taxes and maximize ROI.

How to 1031 Exchange Oil, Gas and Mineral Interests into Mineral Rights & Royalties

In the world of oil and gas, there is a lot of industry jargon that may seem intimidating, redundant, or confusing for first time investors. However, if you were involved in any part of the process for finding, extracting or selling valuable resources, then you may find yourself with mineral interests in your portfolio.

Oil, gas and mineral interests can be extremely valuable, leading to high profit margin sales to interested buyers. In order to lower the amount of taxes paid on these sales (often a significant amount), you can use a 1031 exchange. With this in mind, mineral rights and royalties are a great way to reinvest, as they provide the partial or total ownership of a property’s mineral rights. In this article, we will fully define all of these terms and explain how to use a 1031 exchange to get the most on your investment.

What are Oil, Gas and Mineral Interests?

Okay, first let’s start by defining an oil, gas or mineral interest. To put it simply a mineral interest is the right of a person to access and operate on a property to move an oil or gas operation forward. Mineral interest owners are often compensated for their part in the production with lease bonuses and one time payments.

For a more detailed look on the different kinds of oil, gas, and mineral interests, feel free to read our article on royalty interests for oil and gas.

How to Sell Oil, Gas and Mineral Interests

To initiate a 1031 exchange, you will first need to find a buyer for your mineral interests. Oil, gas, and mineral interests and be sold, traded or gifted on the open market, just like any other kind of private property. Many professional networks exist to help fairly and quickly exchange mineral interests among qualified personnel.

Determining the Value of Oil, Gas and Mineral Interests

There are essentially no limits on the value of oil gas and mineral interest as profitable resource operations become increasingly more and more sought after. For the most part, the value of oil and gas mineral interests are a reflection of past sales with similar properties.

The value of individual oil and gas mineral interests is determined by:

  • Oil and Gas Lease Terms
  • Reserve Volume and Property Size
  • Number of Interested Parties
  • Time Left in Current Contracts
  • Property History and Future Projections

Mineral interest exchanges are not mandated to be public record, however many past transactions can be found if the companies you are working with are transparent in their business operations. As an additional rule of thumb, mineral interests should never be sold to the first potential buyer. If one person is interested, chances are many more will be as well.

Taxes Paid on the Selling Oil, Gas and Mineral Interests

Unfortunately, private transaction for the sale of mineral interests results in fairly serious taxation from the federal and local governments. Before selling your mineral interests, be sure to consider taxes paid on the sale. In some cases, the benefits of keeping the interests may outweigh the net financial gain.

For most transactions, mineral interests sales have the following applied:

  • Federal Income Taxes
  • Capital Gains Taxes
  • Sales Taxes
  • Local Taxes
  • And More
  • Thankfully, many expenses associated with finding and transferring ownership to new buyers can be deducted from the sale of mineral interests on your yearly taxes. To completely eliminate capital gains tax, a 1031 exchange can be used when purchasing a similar property.

Selling Oil, Gas and Mineral Interests with a 1031 Exchange

1031 exchanges are an IRS-sponsored process in which capital gains taxes can be completely eliminated from the sale of oil, gas, and mineral interests. In order to happen, taxpayers must “trade-up” for a new property shortly after selling the original interests.

Oil, Gas and Mineral Interests Like Kind Properties

Although you may not think of them this way, mineral interests can be viewed just as any other ordinary property in the eyes of the IRS. After selling your mineral interests, a 1031 exchange can be used to purchase any of the following, capital gains tax free:

  • Mineral Rights and Royalties
  • Water and Ditch Rights
  • Farms
  • Commercial Businesses
  • Surface Rights
  • Malls
  • And More

Self Storage Facilities 1031 Exchange Timeline

After the sale of oil, gas, and mineral interests, a taxpayer then has 1031 days to purchase a new like kind property with a 1031 exchange. In order to keep the process moving forward, the first of three potential properties must be purchased within 45 days of the original sale.

1031 Exchange Intermediaries for Selling Oil, Gas and Mineral Interests

Identifying properties, processing paperwork, and meeting deadlines can be difficult if you are using a 1031 exchange while maintaining your usual schedule. Thankfully, there are many industry professionals that can help you with each part of the process along the way.

In most cases, it is extremely beneficial to speak with both a 1031 exchange tax professional and mineral interest expert. If one person or company happens to fit both of these qualifications, then the process may be even easier.

Why Purchase Mineral Rights and Royalties?

The biggest difference between mineral interests and mineral rights is the time period and investment potential. Mineral interests are temporary and will expire at the end of any oil and gas lease. Whereas they can possibly be renewed, assets with an expiration date are often better sold then kept.

Mineral rights can lead to ongoing mineral royalties for the extraction and sale of valuable resources. Once a lease has ended, you will still retain your mineral rights, which can be sold or leveraged once again for another oil and gas lease.

Golf

How to 1031 Exchange Golf Courses and Practice Ranges into Mineral Rights & Royalties

For a lot of people, a day out on the golf course is one of the most relaxing ways to spend a sunny afternoon. Afterall, there is an old saying that a bad day on the golf course is always going to be better than a good day in the office. But what if the golf course is your office?

Owning a golf course, practice range, or combination of the two can be stressful. Between managing the staff, maintaining the facilities, and policing the customers, even the most passionate golfers may not be best suited to own the course.

If you’re ready to sell the golf course or driving range, you can maximize the proceeds of your sale by using a 1031 exchange to purchase mineral rights and royalties. With mineral rights, you can obtain a highly valuable property and quickly go back to actually enjoying your time out on the green.

How to Sell A Golf Course or Driving Practice Range

As a sport loved by many for generations, there are many people in this world who dream of buying their own golf course. If you happen to be selling one, or even are ust selling a driving range, then it is up to you to connect to these potential buyers and transfer the property’s ownership.

Driving ranges and golf courses can be sold on the open marketplace, just like any other piece of land or property. Although there are a few golf specific resources available, real estate listings, online auctions, and even newspaper advertisements can be used to sell a golf course or practice range.

Determining the Value of Your Golf Facilities

For the most part, golf courses occupy large tracts of land with many different kinds of structures and developments throughout. In addition to the sum of the value of the course’s assets, any golf course that requires a fee can be considered a future revenue stream. Popular and profitable golf courses will obviously be sold at higher prices than those that require development or marketing.

The value of a golf course or driving range is determined by:

  • The Acreage
  • Property Taxes and Special Designations
  • Number of Existing Structure and Conditions
  • Number of Employees and Company Earnings
  • Membership vs. Public Designation
  • Maintenance History
  • Water Features
  • Sponsorship/Partners
  • And more

Add all of these factors up and golf courses can become a very valuable piece of property. With the identification of the right investor, the sale of a golf course, driving range, or combination of the two will likely end in a large sum of money being transferred between the former and new owners.

Taxes Paid on the Selling Golf Courses and Practice Ranges

Of course, before you start counting your money, it is important to remember that Uncle Sam, as well as many other local and state governments are going to be entitled to a small share of the sale. Although it varies depending on your location, the following taxes are typically applied to the sale of a golf course or driving range:

  • Depreciation
  • Income Tax
  • Capital Gains Tax
  • Sales Tax
  • Local Taxes
  • Fees for Utility Transfer
  • And More

Selling Golf Courses and Practice Ranges with a 1031 Exchange

With a 1031 Exchange, capital gains taxes can be completely eliminated on the sale of a golf course or driving range. In order to do so, taxpayers must purchase a new, similar property while following a specific set of rules as laid out by the IRS. The new property must be of equal or greater value in order to completely eliminate capital gains taxes on tehs sale of a golf course.

Like Kind Properties for the Sale of Golf Facilities

Golf courses, driving ranges, and even miniature golf courses can be sold and exchanged for many different kinds of properties. In order to qualify for a 1031 exchange, golf courses are usually sold with the intent of purchasing:

  • Mineral rights or royalties
  • Businesses
  • Vacant Land or Property
  • Farms
  • Leasing Portfolios
  • And much, much more.

1031 Exchange Timeline when Selling Golf Courses and Practice Ranges

As we mentioned earlier, a 1031 exchange is only going to defer capital gains taxes if the allocated timeline for the purchase of a new property is followed. After selling a golf course or driving range, taxpayers must:

  • Identify a new, like-kind property to purchase within the first 45 days
  • And purchase the new property within 180 days of the sale

Of course, you do not necessarily need to purchase the first property that is identified. Instead, you can choose up to 3 properties to consider before their value and mandatory purchase requirements come into play.

Using a 1031 Exchange Intermediary when Selling Golf Courses and Practice Ranges

In order to save the most money, time, and stress while using a 1031 exchange to sell your golf facilities, we strongly encourage you to seek out and speak with a reputable intermediary. Licensed professionals will ensure that everything is met along the appropriate timelines and that all of the proper paperwork is filed.

Purchasing Mineral Rights and Royalties

Although there are certainly a large number of investments that could be made after using a 1031 exchange, we would like to highlight mineral rights and royalties. After selling your golf course, a passive asset such as mineral rights is a great way to earn a steady income from the sale of valuable minerals.

By working with a mineral rights expert, you may be able to identify plots of land and mineral rights shares that can be extremely valuable both as an income stream and property investment. If you are considering selling a golf course, we highly recommend exploring the possibility of mineral rights acquisition through a 1031 exchange.

1031 exchange shopping center

How to 1031 Exchange Shopping Center into Mineral Rights & Royalties

Today we take a look at 1031 exchange for shopping centers and will uncover a few key questions that people may have on how to 1031 exchange shopping centers into mineral rights and royalties.

With more and more people turning to online retail solutions, shopping malls and strip centers across the country are no longer the highly valuable assets they once were. Whereas it is true that many restaurants and businesses still use malls and shopping centers as a physical space, the competing number of tenants has been slowly lowering nationally for the past decade.

If you own a shopping mall or strip center, then this trend may be reason enough for you to consider selling your property. To maximize the amount of capital you net, a 1031 exchange can be used to upgrade your mall into highly valuable mineral rights.

In this article, we will explore how to sell a shopping mall or strip center before outlining how and why to use a 1031 exchange for shopping centers to purchase mineral rights with the proceeds.

How to Sell Your Shopping Mall & Strip Center

Although they are dwindling in popularity, shopping malls and strips centers are often still located in very highly sought after locations. On the marketplace today, many investors find creative ways to revitalize shopping malls and strip centers into highly profitable properties.

Due to their large stature and high number of moving parts, finding a strong bid for the sale of your shopping mall or strip center may be somewhat difficult.

Determining the Value of Your Mall or Storefront

First, it is important to know the approximate value of a mall or storefront. Whereas the market for malls is going to fluctuate just as any other real estate investing will, there are many aspects of a mall that can be added up to determine the approximate value of the property.

To get a rough idea of what a mall or storefront might be worth, owners must consider:

  • The Land
  • The Buildings
  • The Parking Areas
  • The Number of Paying Tenants
  • The Mall’s History and Zoning
  • Property Taxes
  • Community Trends and Developments
  • And Much More

Storefronts and malls are sold on the open marketplace with buyers able to bid and pay whatever they are willing to acquire. Oftentimes, commercial real estate companies are hired to specifically present and screen potential candidates for the sale of a mall or strip center.

Taxes Paid on the Selling Shopping Malls & Strip Centers

Unfortunately, the sale of a large asset such as a mall or a strip center requires the former owner to pay a large number of taxes and fees along the way. Although it may vary between locations across the country, most commonly, mall sales require the following be paid:

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

1031 Exchange Shopping Centers

Of course, savvy investors are well aware that 1031 exchanges can be used in order to defer some or all capital gains taxes associated with the sale of a mall or strip center. Post-sale, taxpayers can purchase another large property asset through a 1031 exchange. If the new property is of equal or greater value than the mall, no capital gains taxes will be applied to the original sale.

Like Kind Properties for the Sale of Shopping Centers

According to the IRS, taxpayers must purchase an asset that is similar to a mall or strip center in order to qualify for a tax-free 1031 exchange. Although the list goes on and on, here are some of the most common “like kind” properties purchased after the sale of a shopping center:

  • Mineral Rights and Royalties
  • Hotels and Motels
  • Apartment Buildings
  • Office Buildings
  • Condominiums
  • Gas Stations
  • Convenience Stores
  • And more.

1031 Exchange Shopping Center Timeline

Once a shopping mall center is sold, a new property must be purchased within 180 days in order to qualify for a 1031 exchange. To start, taxpayers must identify at least one property of similar or greater value within 45 days. This initial property is not necessarily the one that needs to be purchased, but the 45-day window is designed to keep the process moving forward.

Using an Intermediary to 1031 Exchange Shopping Center

With deadlines, paperwork, and tons of properties to analyze and consider, a 1031 exchange is oftentimes never a one man job. Instead, it is recommended to seek out a qualified 1031 exchange intermediary in order to smooth the process of selling, buying, and maximizing the investment of your assets.

Why 1031 Exchange Shopping Center into Mineral Rights?

Mineral rights and royalties are a great investment that allows shareholders to profit from the sale of oil, gas, coal, and other valuable resources extracted from the earth. Whereas a shopping mall or strip center is usually only profitable if all of the space is filled by paying tenants, mineral rights are typically only leased to one oil and gas company.

What this means is that as a new mineral rights owner, there is very little you will likely have to do aside from cash checks once a successful oil or gas operation is up and running.

How to Maximize Your 1031 Exchange with Mineral Rights

A 1031 exchange helps transfer the sale of a property to the purchase of mineral rights, without any capital gains taxes being applied. For over 100 years, mineral rights have been a consistent part of many American inverter’s portfolios and are therefore a steady and reliable asset to own.

Of course, there are many mineral rights on the marketplace that are extremely overvalued. Working with an industry expert to identify the most profitable mineral rights and royalties on your budget is the key to ongoing financial success.

Conclusion

Today, shopping malls and strip centers may not be as profitable as they once were. With that in mind, selling your strip mall can still potentially be a large money making endeavor. In order to eliminate capital gains taxes and ensure ongoing success, smart investors should highly consider looking into mineral rights and royalties after selling a mall or strip center.

How to 1031 Exchange Trailer Parks into Mineral Rights & Royalties

If you own a trailer park, it can be difficult to part ways with your property. After all, having a lot of tenants in a trailer park can lead to a nice monthly income stream. However, unreliable rent payments, frequent upkeep, neighborhood issues, and completely unrelated circumstances may have you thinking that perhaps there are better ways to invest your money.

Well guess what, mineral rights and royalties are another great way to earn a monthly income, and you will never have to knock on a trailer door again (unless you visit the drill site). With a 1 1031 exchange, you can maximize the sale of a trailer park by turning it into valuable mineral rights and royalties.

In this guide, we will cover 1031 exchange tailer parks as well as go over some key questions you may have such as how to determine the value of your trailer park, how to identify a like kind property, and more.

How to Sell A Trailer Park

First things first, you’ll have to sell the trailer park. If you’ve owned it for a number of years, then you are probably well aware that this will not be a difficult step. In fact, trailer parks are one of the lowest multi-unit property investments that can be made today.

With a relatively low barrier of entry and the potential to earn a large sum of monthly rent payments, finding a buyer for a trailer park is rarely a difficult task. Here are a few of the most common methods trailer park owners sell their property:

  • Word of Mouth
  • Selling to an Existing Tenant (Or Shared Group_
  • Online Listings
  • Physical Signs
  • Realty Agents
  • And more

Determining the Value of Your Trailer Park

The value of a trailer park is determined by many factors, some of which can be controlled, while others are strictly circumstantial. In truth, a trailer park is more than just the sum of its property assets, as paying tenants dramatically increases the approximate value of a trailer park investment.

To best determine the total ballpark value of a trailer park, one must consider:

  • The Size of the Property
  • The Current Occupancy Percentage
  • Vacant Lots and Possible New Developments
  • The State, County & Municipality
  • Energy Sources and Rates
  • # of Tenants and Tenant History
  • And more

Of course, a trailer park is going to be as valuable as the highest paying investor. It is always recommended to get multiple bids, appraisals, and offers when selling a trailer park.

Taxes Paid on the Selling Trailer Parks

Unless you’re taking the cash and headed out of the country to live as an outlaw, there are going to be a hefty amount of taxes to be paid when selling a trailer park. Although they will vary state to state, the following taxes may be taken by local, state and federal governments:

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

Of course, one of the best ways to reduce the amount of tax paid on the sale of a trailer park, is by using a 1031 exchange.

1031 Exchange Trailer Parks

With a 1031 exchange, a trailer park can be sold and “exchanged” for another asset of greater or equal value.

According to the IRS, the assets must be similar “like kind” properties. When a trailer park is sold and a property is purchased with 1031 exchange, capital gains taxes will not be applied to the original sale.

Like Kind Properties for the Sale of Trailer Parks

Although they may not physically resemble some of the similar properties outlined by the IRS, trailer parks can be used in a 1031 exchange to purchase a number of different assets without paying any capital gains tax. Most commonly these include:

  • Mineral Rights and Royalties
  • Apartment Buildings
  • Farms
  • Strip Malls and Businesses
  • Parking Lots
  • Self Storage Facilities
  • Commercial Buildings
  • And More

1031 Exchange Trailer Parks Timeline

After the sale of a trailer park, taxpayers have 45 days to identify at least one like-kind property they are interested in purchasing in order to use a 1031 exchange. Up to 3 properties can be identified regardless of their value. Other limits also apply.

After narrowing down the potential investments, new properties must be purchased within 180 day of the sale of a trailer park in order to qualify for a valid 1031 exchange.

Using an Intermediary to 1031 Exchange Trailer Park

In order to make sure that deadlines are met, paperwork is filed, and the absolute pest properties are identified and purchased, we highly recommend using a 1031 exchange intermediary. Taking the legal and tax weight off of your shoulders will not only save you time, but will also save you a considerable amount of money.

How to Purchase Mineral Rights and Royalties

As a “like kind” property, both mineral rights and mineral royalties can be purchased in a 1031 exchange after the sale of a trailer park. In some cases, active mineral rights will land investors in a stream of steady income payments for the sale of extracted minerals. On other properties, untapped mineral rights can be flipped, sold, or leased to an interested oil or gas company.

Are mineral rights a good investment?

The short answer here is yes: mineral rights are generally going to be a good investment. Although gas, oil, and coal prices may fluctuate from time to time, the market is always going to be strong while large companies identify cost effective ways to extract and use the valuable resources from below the surface of the earth.

How to Maximize Your 1031 Exchange with Mineral Rights

In order to maximize your 1031 exchange (and minimize the amount of tax you pay), you will want to purchase profitable mineral rights at a reasonable rate. Talking to industry experts, and reviewing a large number of potential mineral rights opportunities is the best way to lower the risk in your investment.

Conclusion

Ultimately no matter how sentinel you may be, selling a trailer park for a lump sum of cash is going to feel pretty good. In order to keep more of that money in your theoretical pockets, a 1031 exchange is a great way to defer capital gains taxes with the acquisition of a new property. With mineral rights and royalties, your investment will go further, as profits from the sale of oil and gas production is a valuable asset in any portfolio.

How to 1031 Exchange Business to Mineral Rights

If you’re surfing the internet looking for information on how to 1031 exchange business into mineral rights, you’ve come to the right place.

In this article, we are going to discover everything there is to know about the 1031 business exchange.

Starting, building, and operating a business is one of the most exciting things you can do with your own career. Entrepreneurship is often stressful, but almost always worth it in the pursuit of independent goals and accomplishments.

However, for most business owners, there comes a time when it may be best to “cash out.” Every drop of blood, sweat, and tears that has gone into building a company can be rewarded with a nice cash sale of a business and its assets.

Of course, as one door opens, another door closes. Whereas it may not be in the forefront of most business owners minds, one of the best ways to maximize the capital gain from selling a business is to use a 1031 exchange for mineral rights.

How to Sell Your Business

If you’ve got a great product, people will want to buy it. If you’ve got a great business, people will want to buy that too. More often than not, buyout offers for business come when owners least expect it. For those who are not emotionally tied to their company’s operations, a quick and easy one time sale to a solicitor can yield great results.
For most business owners, however, a sale is not going to come that easy. Instead, companies can utilize business networks and listing sites in order to get the potential sale of the organization in front of as many eyes as possible.

Determining the Value of Your Business

Determining the value of a business may seem intimidating, but there are many hired professionals who actually do this sort of thing for a living. Using real numbers from a company leveraged against current market trends, businesses can evaluate their value through a few specific factors. This includes:

  • Monthly or Quarterly Income and Profit Margins
  • Business Assets and Property
  • Structure of Company (i.e. private vs public)
  • Inventory & Number of Employees

Most commonly, the sale of a business rarely comes in the form of one single check. Instead, liquidating or folding businesses often diversify their portfolio by selling their capital and property assets as in separate entities.

Taxes Paid on the Sale of a Business

As business owners know all too well, taxes are nearly impossible to avoid when operating any organization that exchanges capital. Although different factors are largely determined by the type of business being sold, the following are the most common taxes paid on the sale of a business:

  • Depreciation Recapture
  • Ordinary Federal Income Tax
  • Capital Gains Tax
  • Corporate Taxes (Possibly Doubled)
  • Sales Tax
  • Local Taxes
  • Additional Medicare Taxes
  • And More

Clearly, selling your business is not going to land you a stack of tax-free money on which you can retire. In fact, if a business is primarily made up of physical assets, total taxation of up to 50% is possible on its sale.

Selling Your Business with a 1031 Exchange

If you are paying capital gains taxes on the sale of a business, it is possible to avoid doing so by purchasing another, similar property. By “trading up” and purchasing a new property, the IRS waives capital gains taxes on the sale of a business.

Like Kind Properties for a 1031 Business Exchange

For the exchange of a business, there are many “like-kind” properties that can be purchased under a 1031 exchange. Most commonly businesses can be 1031 exchanged for:

  • Land
  • Property
  • Other Businesses
  • Farms
  • Parking Lots
  • Mineral Rights and Royalties
  • And more

Thankfully, the IRS is not too harsh on the term “like-kind.” In fact, most properties and assets that are designed to continue to produce income will have no issue at all qualifying for a 1031 exchange when selling a business.

Timeline for Using a 1031 Business Exchange

A 1031 exchange delivers considerable tax advantages. However, a specific timeline must be followed in order for the IRS to approve an exchange. Specifically, new properties must be identified within 45 days of the sale of the farm. Beyond that, the new property must be purchased within 180 of the sale of the farm.

A total of three properties can be identified as potential purchases. If more than three properties are identified, then it gets a bit more complicated. For further information about all of the regulations for using a 1031 exchange, you can read our article on the rules for using a 1031 exchange.

Using an Intermediary to 1031 Exchange Business into Mineral Rights

Like in any aspect of a business, working with professional partners is the key to success. The sale of a business is no different. Although you may be working with a broker already, adding a 1031 exchange intermediary to your team is the best way to guarantee that capital sales taxes can be completely eliminated. Using a 1031 business exchange professional is a great way to have the process follow the expected timeline, without any speed bumps along the way.

How to Purchase Mineral Rights After the Sale of Business

When searching for like-kind properties after the sale of your business, we highly recommend working with a mineral rights and royalty broker. Speaking to a professional in the private resource ownership industry is a great way to identify potentially valuable mineral investments.

Why are mineral rights a good investment?

As far as new properties go, mineral rights and royalties are one of the best investments former business owners can make. Whereas active mineral rights will deliver a monthly income stream from the sale of oil or gas, inactive mineral rights can be just as valuable.

How to Maximize Your 1031 Business Exchange with Mineral Rights

If you choose to sell your business and use a 1031 exchange to purchase mineral rights, then you’ve just entered into an entirely new venture that only requires as much attention as you see fit. Actively pursuing mineral rights leases and sales can help you maximize your reinvestment by turning your mineral rights into a monthly profit machine.

Conclusion

Selling a business can be extremely painstaking, but in the end is usually worth it. By transforming a business sale into a 1031 exchange into mineral rights and royalties, former business owners have the opportunity to enter into a whole new way to earn money. For those that are interested, speaking to a professional will always yield the best results.

How to 1031 Exchange Farms into Mineral Rights

So you’ve finally done it, you have decided to sell the farm. Unfortunately, with a large sum of money heading towards your bank account, federal capital gains taxes are going to be applied. Depending on your annual salary, federal capital gains taxes can take up to 20% of the sale price from your farm.

In order to maximize your wealth, a 1031 exchange for mineral rights can be a go-to option. In this article, we will outline the steps on how to use a 1031 exchange to transform farms into mineral rights and royalties, completely tax-free.

How to Sell a Farm

First things first, you will have to sell the farm. There are a few ways to go about this. On one hand, you can try selling your farm by yourself. On the other hand, you can utilize a specialized broker or real estate agent to do all of the work for you (at a price, of course). As there is a considerable amount of work to be done, we strongly suggest working with a professional.

Determining the Value of the Farm

For most people, a farm includes most if not all of an individual’s assets. In order to determine the final sale price (and sales tax) associated with a farm, the property and everything it contains must be appraised. Most commonly, the sales price of farms in the United States is largely determined by:

  • The Amount of Land
  • # of Buildings and Size (Homes, barns, storage, etc.)
  • Equipment (tractors, irrigation systems, bailers, etc.)
  • Livestock (cows, horses, etc.)
  • Supplies and Inventory (crops, fertilizer, etc.)

Taxes Paid on the Sale of a Farm

All in all, the sale of farmland can bring in a considerable amount of money. With that in mind, it is always going to be taxed in some form or another. Currently, the following taxes are applied to the sale of a farm in the United States:

  • Federal Income Tax
  • Recapturing of Depreciation
  • State Taxes
  • Federal Gains Tax

All in all, the amount of tax imposed on the sale of farmland can range anywhere from between 20% to 50% depending on all of the variable conditions. With this in mind, eliminating any of the taxation is a surefire way to save a bit of money during the sales process.

Using a 1031 Exchange on the Sale of a Farm

As we mentioned earlier, using a 1031 exchange is a great way to lower or eliminate capital gains taxes on the sale of a farm. A 1031 exchange can be used when another property is purchased that is similar to the farm. In buying a “like-kind” asset, former farm owners are not required to pay capital gains tax on the sale of their estate.

1031 Exchange For Mineral Rights – Requirements

In order to qualify for a reduction in capital gains tax with a 1031 exchange, the following timeline must be true:

  • The same taxpayer sells and purchases both assets.
  • New properties must be identified within 45 days of the sale of the farm.
  • The new property must be purchased within 180 of the sale of the farm.

Of course, to qualify for a full elimination of capital gains tax, the new property must be of equal or greater value (i.e. trading up). Up to three properties can be identified as potential purchases regardless of their value. For more information on the rules and regulations for using a 1031 exchange, feel free to read our detailed page on the 1031 exchange process.

Like-Kind Properties for the Sale of a Farm

In order to use a 1031 exchange, the same taxpayer must purchase a new property that is similar to the old one. For the sale of a farm, there are many options within the realm of property that can be exchanged for, completely tax-free. Most commonly, farm sales are exchanged for:

  • Better Farms
  • Livestock
  • A Home or Apartment
  • Water and Ditch Rights
  • Vacant Land
  • Mineral Rights and Royalties

How to Purchase Mineral Rights and Royalties

More than anything, investments into mineral rights and royalties are a great way to reinvest the capital derived from the sale of a farm. Mineral rights entitle landowners to the valuable resources found below the earth’s surface. Mineral royalties are earned when those resources (such as coal, natural gas, or oil) are extracted and sold in the marketplace.

Using an Intermediary to 1031 Exchange Mineral Rights

In order to make sure the process goes as smoothly as possible, using an intermediary to 1031 exchange farm into mineral rights is the best way to go for. Utilizing the knowledge and resources of a licensed professional will not only help you save the most on taxes but will make the process easier along the way.

Ranger Land and Minerals has over 100 years of combined industry experience transforming assets into profitable mineral rights and royalties through 1031 exchanges. Our team of professionals is here to help leverage your farm for the best possible mineral rights and royalties.

Maximizing Return on Investment

Once you sell the farm, putting the money into something brand new such as mineral rights or royalties can be very intimidating. However, with the right purchase, your farmland very well may transform into a passive stream of income, profitable beyond any back-breaking labor tending to crops or livestock.

Purchasing Active Mineral Rights: With active mineral rights, cash flow is generated each month as mineral royalties are divided among stakeholders every single month. 1031 Exchanging for active mineral rights can lead to an immediate and ongoing income stream.

Purchasing Non-active Mineral Rights: Alternatively, mineral rights in high-production areas can also be profitable even if they are not currently being used by an oil or gas company. Non-active mineral rights can be bought and sold for profit, or retained through an oil and gas lease. Depending on your negotiation, new oil and gas leases can lead to steady income for years on end.

Conclusion

Ultimately, selling your farm is a tough decision. Once you’ve done it, however, your next step shouldn’t be so tough. Using a 1031 exchange to purchase mineral rights or royalties is a great way to reinvest your money without having to pay a capital gains tax. With the right purchase, mineral rights can be a very valuable asset in any portfolio.