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The book describes how real estate investors can safely defer capital gains tax by using a Qualified Intermediary to do a Like Kind exchange. The "safe harbor" process and IRS rules for completion of a tex deferred exchange of real estate are complex. This book explains the process step by step so that taxpayers can successfully compete their exchange. The criteria for qualifying properties is clearly explained. Worksheets in the book allow the taxpayer to compute the federal tax that will be due if the taxpayer does not do an exchange. The important reinvestment requirements are explained in detail to ensure that the exchange will be fully tax free. The 45 day identification requirement and the 180 day exchange period are explained. A sample identification letter is included for taxpayer use. Special exchange subjects included in the book include how to do a Reverse Exchange, combining an installment sale with a like kind exchange, how to convert your real estate rental into your principal residence, and the growing use of Tenancy-In-Common (TIC) commercial properties to complete an exchange.
The actual Internal Revenue Code and IRS Regulations on like kind exchanges are included in the book's appendix. Also included are the suggested real estate contact addendums to show the taxpayers intent to do a like kind exchange. A tutorial on the new IRC Section 121 rules for exclusion of capital gains on the sale of a principal residence is also included. The final chapter in the book give a full explanation of how to report the exchange to the IRS and complete the intricate IRS Form 8824.
Ed Horan is the founder and President Emeritus of Realty Exchange Corporation. Realty Exchange Corporation is a Virginia Corporation whose only business is to serve as a Qualified Intermediary for the like kind tax deferred exchanges of real estate throughout the United States. Realty Exchange Corporation was established by the author in 1990 to fill the need for a dedicated organization that could provide knowledgeable and responsive Qualified Intermediary services to investors and real estate professionals. Ed is a graduate of Syracuse University and George Washington University with a Master of Science degree in Business Administration. Ed holds the Federation of Exchange Accommodators designation as a "Certified Exchange Specialist". Prior to 1981 Ed served as a Comptroller with the United States Air Force. Ed is currently licensed in Virginia as a real estate broker. Since 1982 Ed has been a frequent writer and lecturer on residential real estate investments, exchanges, and the impact of taxes on real estate transactions and real estate professionals, In the past he has been approved as a Continuuing Education Instructor in Maryland, Delaware, Virginia and the District of Columbia. He is the 1990 winder of the national Real Estate Educators Association award for the "Best Single Education Program."