You might be selling your property to the government in a condemnation or seizure – an involuntary sale. The kissing cousin to section 1031 is section 1033 that allows for a deferral of gains when you involuntarily sell your property. In 1033 you don’t need a qualified intermediary to hold your proceeds. You’re allowed to hold your proceeds and you have to continue your investment into replacement property within certain timeframes. 1033s are typically advised by and coordinated through your accountant. You may have to file an election for the year in which you receive your first payment. You may also need to file form 8824 to report the transaction. 1033s differ from 1031s in that you have a longer period of time to reinvest and you’re allowed to hold your own proceeds.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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