Thank you for choosing Growth 1031, Inc. as your 1031 Exchange Accommodator!
Relinquished property: This is the property which you, the Exchangor, want to sell and defer your taxes on the Capital Gains or Depreciation Recapture. The property that you are selling must be property that you have held for investment or for business purposes.
Replacement property: This is the property that you, the Exchangor, intend to purchase to replace the Relinquished Property so that you can qualify for a Section 1031 Like Kind Exchange. This can be a single property or multiple properties.
How is "related party" defined?
Purchasing your replacement property from a related party may disqualify your 1031 exchange if you do not follow specific rules and guidelines issued by the Internal Revenue Service (IRS). Pursuant to Sections 267(b) and 707(b) of the Internal Revenue Code related include, but are not limited to, immediate family members, such as brothers, sisters, spouses, ancestors and lineal descendants. Related parties do not include stepparents, uncles, aunts, in-laws, cousins, nephews, nieces and ex-spouses.
Related parties also include corporations, limited liability companies or partnership in which more than 50% of the stock, membership interests or partnership interests, or more than 50% of the capital interests or profit interests is owned by the taxpayer.
Please contact us at firstname.lastname@example.org or 619-991-1031 immediately if you have concerns or questions about purchasing from a related party.