[quote=SK in CV]
No can do. Replacement must be identified within 45 days, and transaction closed within 180 days of disposition of original property. These rules (as codified in 1979) are the result of a SC case, a guy named Starker, who attempted just what you’ve described, keeping the funds in hands of the buyer for up to two years and acquiring 12 pieces of replacement properties over that time. Starker partially won his case. Laws were rewritten to allow the deferred exchange with specific rules. Huge case when it went down, with expectations of a huge increase in tax free exchanges. Never really happened. They’re still pretty rare. People just don’t plan that well. Even when they are done, they’re often done wrong.[/quote]
Thanks CV. I’m not planning to sell just because for me, my rentals do pretty well on a cash flow basis, and I’m hoping I can use this as if it’s my private pension for retirement, for some of us that don’t have the luxury of a pension 🙂
I was just curious because the internet is filled with things about “Deferred Sales Trust”, and the way people talk about it suggested it was an alternative to a 1031 exchange. I know, if it’s posted on the internet, it must be true! (lol)…I was just curious if there was some corner case in that is would be an alternative to a 1031, and if so, how it would work, no matter how complicated it would be. But what you are saying is that, there is no alternative to a 1031 exchange.
is suggesting…
[quote]
First, Investors must realize that the Deferred Sales Trust is a relatively new tax-deferral strategy. It should only be used by sophisticated investors who can understand and accept the risk of using a new and untested tax-deferred strategy.
Generally, the 1031 Exchange is a better tax deferred strategy for most investors. However, the Deferred Sales Trust may be an alternative tax-deferred strategy when you do not wish to, or can not, acquire like-kind replacement property through a 1031 Exchange.
