1635 Main Street, Longmont, CO
Operating as a stone yard in the same family for 50 years, this 4.85-acre property fronts US Hwy 287, with the remainder of the property set back from the road and primed for redevelopment. Commercial zoning on entire parcel permits an expansive variety of uses: multi-family, medical office, mixed use, or subdivide and sell off the retail frontage. Up to 140 units possible. Possibility for further assemblage of parcels to the south and west.
Property Size: 4.85 Acres, 211,157 SF
Price Per SF: $12.76
Zoning: Commercial (C)
Contact Karla: 303-589-8418
1031 EXCHANGE RULES
How to defer taxes and reinvest proceeds from the sale of an investment in real estate, land or water rights
Section 1031 of the U.S. Internal Revenue Code allows investors to defer capital gains taxes on the exchange of like-kind properties. 1031, or tax-deferred, exchanges hold great advantages for investors. Working with a Realtor experienced in 1031 exchanges is key to a successful transaction. I am happy to consult with you to discuss your individual investment needs. Here are the basic rules:
Rule #1 – Both the Old Property and the New Property must be held for investment or used in a trade or business
Many people think that if you sold a purple duplex, you must buy a purple duplex. This is not the case – you can buy any other kind of investment real estate: you could buy an apartment building, water rights (yes, in Colorado water rights are property rights), an office building, a warehouse or bare land.
Rule #2 – 45-day Identification Requirement
From the day you close the sale of your Old Property, you have 45 days to complete a list of properties you might want to buy. It is recommended that the properties be under contract before the final list is submitted.
The 45 days are calendar days. That means that if the 45th day falls on a Saturday or Sunday, or a holiday such as the 4th of July or New Years Day – that is THE FINAL DAY: you must have your list completed by midnight on that day. There are no exceptions or extensions.
Rule #3 – The List
Typically the list of replacement properties will have three properties or less. If the list has more than three properties a different set of rules apply.
If more than three properties are identified, the aggreate value of all those replacement properties cannot exceed 200% of the value of property sold. For example, if you sell your property for $500,000, the replacement properties should total no more than $1,000,000. If going over the 200% limit, then you must aquire, at a minimum, 95% of the identified properties on the list, or the entirety of the 1031 exchange could be disallowed.
Rule #4 – 180-day Purchase Requirement
From the day of closing, you have 180 days to close the purchase of what you are going to buy. And what you buy has to be on your 45-day list. The 45- and 180-day requirements run concurrently, meaning that when your 45 days are up, you only have 135 days left to close. And like the 45-day identification requirement, there are no extensions.
Rule #5 – Qualified Intermediary Requirement
You cannot touch the money between the sale of your Old Property and the purchase of your New Property. By law you have to use an independent third party to handle the exchange (see example above).
Rule #6 – Title Requirement
The tax return that holds title to the Old Property must be the same tax return that takes title to the New Property. For example, if Hans and Sue are married (i.e., a joint return) and they sell the Old Property, then both Hans and Sue must take title to the New Property.
Rule #7 – Reinvestment Targets
To defer ALL of your capital gains tax, you must buy a property of equal or higher value than the one you sold. And you must reinvest all of the cash proceeds from the sale. If you want to withhold some amount from the proceeds of the Old Property, that is possible. However, you will pay capital gains tax on that portion.