Can I Use a 1031 Tax Deferred Exchange for a Real Estate Syndication Investment?

One of the unique things in our Federal Tax Code is the 1031 Tax Deferred Exchange for real estate.  Section 1031 allows a seller to exchange their property for a “like kind” property and defer the capital gains until the exchange property is sold.  We are often asked if an investment in a Real Estate Syndication would qualify as an exchange property for the purpose of effecting a 1031 Exchange.  The answer to that question is – Yes, with certain minimum investment requirements.

One of the most challenging aspects of doing a 1031 exchange is the timing of events.  You have 45 days from the sale of the relinquished property to identify the (up to 3) replacement property, and 180 days to acquire the replacement property.  So it is important that you visit with the Syndicator to make sure that they have a property they will be closing on within your 180 day timeframe.

Additionally, if you are an investor with Mission Bay Capital Partners you may also be able to defer your capital gains by doing a 1031 exchange into the next property acquisition Mission Bay aquires.  Again, timelines are critical and we highly recommend consulting not only Mission Bay Capital Partners, but with your tax professional to advise and walk you through the process.

To learn more about Mission Bay Capital Partners and our investment process, go to Mission Bay Capital Partners is a real estate investment firm that enables passive investors to gain access to exclusive, well-vetted, multi-family real estate investments that we select, fund, and profit from together.