NAFEP 1031 Rescue Services
What is a 1031 Rescue?
The 1031 Rescue is a tax compliant strategy that allows the 1031 exchangor to receive capital gains deferral in the event that their 1031 fails. This is accomplished through the use of NAFEP's Self Directed Installment Sale (SDISSM) in conjunction with a 1031 exchange.
- If the 1031 exchange fails, then the QI will turn over a installment note for your property
- You will then receive a series of payments and defer capital gains taxes over the term of the note
1031 Rescue Brochure
1031 Rescue Presentation
The Problem
With a typical 1031 exchange, if the exchangor fails to successfully complete the exchange, then they must pay all capital gains taxes in that tax year. Capital gains taxes can be 20% to 28% for both federal and state, depending upon the state.
The reasons for a 1031 failure may be due to:- Not finding the replacement property
- Not closing on the replacement property with the 180 day window
- Seller backs out
- Terms of sale cannot be met
- Financing falls through
- And many others...
Note: The failure rate of 1031 exchanges is around 15%, or $23 billion annually.
Source: NAFEP; FEA, Aug 2007 -Letter to FTC
Source: Los Angeles Business Journal, Nov 26, 2001 • by Christopher Keough
The Solution - A 1031 RescueTM
The 1031 Rescue is a tax compliant strategy that allows the 1031 exchangor to receive capital gains deferral in the event that their 1031 fails.
This is accomplished through the use of NAFEP's Self Directed Installment Sale (SDISSM) in conjunction with a 1031 exchange.
- If the 1031 exchange fails, then the QI will turn over a installment note for your property
- You will then receive a series of payments and defer capital gains taxes over the term of the note
Benefits of the 1031 RescueSM
- Guaranteed deferral of capital gains taxes
- No worries about the many pitfalls that cause the 1031 to fail
- Deferral of capital gains taxes builds your wealth
- The installment sale provides for a stream of income without the risks associated with a traditional installment sale.
- Ability to take cash after failure and pay the taxes
- Ability to use the note as collateral for purchase of a property after the 1031 fails
Need More Info
1031 Rescue Brochure
1031 Rescue Overview Presentation
For more information on the 1031 RescueSM capital gains deferral product.
Call one of staff advisors at (801) 266-9900, or to request that someone contact you, send an instant email message by submitting the information below.