1031 Exchange Basics in Old Lyme, CT

1031 Exchange Like Kind Property in Old Lyme, CT

Understanding the Fundamentals in Old Lyme, CT

A 1031 exchange is one of the most powerful tools available to real estate investors in Old Lyme, CT, allowing you to defer capital gains taxes when selling an investment property in Old Lyme, CT and reinvesting in another. This strategy enables you to preserve more of your capital, build wealth, and expand your real estate portfolio without the immediate tax burden.

We simplify the exchange process in Old Lyme, CT, ensuring you stay compliant with IRS regulations while maximizing your investment potential.

What Is a 1031 Exchange in Old Lyme, CT?

A 1031 exchange, named after Section 1031 of the Internal Revenue Code, allows investors in Old Lyme, CT to sell one investment property in Old Lyme, CT and purchase another of equal or greater value without paying immediate capital gains tax. Instead of cashing out and triggering a taxable event, your proceeds are transferred to a Qualified Intermediary (QI)—like us—who holds the funds until you acquire a replacement property.

By deferring taxes, you can reinvest 100% of your proceeds in Old Lyme, CT, giving you more purchasing power for your next investment.

Tax benefits of a 1031 exchange in Old Lyme, CT

Qualified Intermediary holding funds in Old Lyme, CT

How Does a 1031 Exchange Work in Old Lyme, CT

Plan Your Exchange in Old Lyme, CT

Before selling your property in Old Lyme, CT, consult with a 1031 exchange expert to ensure your transaction is properly structured.

Sell Your Property in Old Lyme, CT

Once your property sells, the proceeds are transferred to a Qualified Intermediary in Old Lyme, CT—not directly to you—to maintain compliance with IRS rules.

Identify a Replacement Property in Old Lyme, CT

Within 45 days of selling your original property in Old Lyme, CT, you must identify one or more potential replacement properties in writing in Old Lyme, CT.

Purchase the Replacement Property in Old Lyme, CT

You have 180 days from the sale of your original property to close on the new property using the proceeds held by your QI in Old Lyme, CT.

Complete the Exchange & Defer Taxes in Old Lyme, CT

By following IRS rules and deadlines, you successfully defer capital gains tax and reinvest in a new property in Old Lyme, CT without losing money to taxes.

Key 1031 Exchange Rules & Requirements in Old Lyme, CT

Like-Kind Requirement
– The replacement property in Old Lyme, CT must be of the same nature (investment or business use real estate).
45-Day Identification Rule
– You must identify potential replacement properties within 45 days in Old Lyme, CT of selling your original property.
180-Day Exchange Rule
– You must close on the new property within 180 days of selling your original property in Old Lyme, CT.
Qualified Intermediary (QI) Requirement
– Funds must be held by a third-party intermediary in Old Lyme, CT to ensure IRS compliance.
Equal or Greater Value Rule
– To defer all taxes, the new property in Old Lyme, CT must be of equal or greater value than the one sold.

Types of 1031 Exchanges in Old Lyme, CT

1

Forward Exchange (Traditional 1031 Exchange) – Sell your property first, then purchase the replacement property in Old Lyme, CT within the IRS deadlines.
2

Reverse Exchange – Acquire the replacement property in Old Lyme, CT before selling the existing one for greater flexibility.
3

Build-to-Suit (Construction Exchange) – Use exchange proceeds to improve or build on the replacement property in Old Lyme, CT.
4

Delayed Exchange – The most common type, where funds are held by a Qualified Intermediary in Old Lyme, CT while you find a replacement.
5

Simultaneous Exchange – The sale of the relinquished property and purchase of the replacement occur on the same day.

Benefits of a 1031 Exchange in Old Lyme, CT

A 1031 exchange allows real estate investors in Old Lyme, CT to defer capital gains taxes, keeping more money working for them instead of paying it to the IRS. By reinvesting 100% of the proceeds, investors gain more buying power, making it easier to upgrade to a larger or better-performing property in Old Lyme, CT.

This strategy also helps with portfolio growth and diversification in Old Lyme, CT, allowing investors to explore new markets, property types in Old Lyme, CT, or higher-value assets. Additionally, a 1031 exchange offers estate planning benefits, reducing tax burdens for heirs while enabling long-term wealth accumulation without IRS penalties.

Benefits of a 1031 Exchange in Old Lyme, CT

Common 1031 Exchange Mistakes to Avoid in Old Lyme, CT

Missing IRS Deadlines – The 45-day and 180-day rules in Old Lyme, CT are strict.
Touching the Sale Proceeds in Old Lyme, CT – If you take possession of the funds, you’ll owe taxes.
Choosing an Unqualified Intermediary in Old Lyme, CT – A trusted QI ensures compliance and security.
Failing to Meet the Like-Kind Rule – Make sure your replacement property qualifies under IRS guidelines.
Not Reinvesting Enough – If you buy a lower-value property, you may owe partial capital gains tax.

Why Choose 1031 Exchange Network in Old Lyme, CT?

No-Fee Exchanges – Keep more of your money in Old Lyme, CT—$0 upfront fees and interest-bearing accounts.
Security & Compliance – Funds held in segregated FDIC-insured accounts in Old Lyme, CT for ultimate safety.
Available 7 Days a Week – Get expert guidance when you need it, from 8 AM–Midnight (EST).
50+ Years of Expertise – Attorneys, CPAs, and exchange specialists in Old Lyme, CT guiding every transaction.
Nationwide Service – We facilitate 1031 exchanges across all 50 states in Old Lyme, CT.

Get Started with a 1031 Exchange Today in Old Lyme, CT

The 1031 exchange process in Old Lyme, CT doesn’t have to be complicated—especially when you have the right partner. We make it seamless, secure, and fee-free so you can focus on growing your real estate investments in Old Lyme, CT.

Start Your Exchange Schedule a Free Consultation