A short preview of the eleven items every landlord should confirm before any 1031 exchange listing goes live.
Eleven items every landlord should confirm with their CPA, attorney, and listing broker before a property goes on the market. Three are previewed below. The other eight, with the full prompts and what to ask your advisors, sit inside the free account.
The exchange rules require the same taxpayer on both sides of the sale. If the property is in a revocable trust, you exchange as that trust. If it's in an LLC you own 100%, you exchange as that LLC. Getting this wrong mid-exchange is one of the most common reasons a transaction unwinds.
Current deed. Most recent title insurance policy if you have it.
Purchase price plus improvements, minus depreciation, equals adjusted basis. This number drives every tax calculation, and it is almost never what the landlord thinks it is. Depreciation over a 20- or 30-year hold reduces basis to a fraction of the purchase price.
Purchase settlement statement. Prior years' tax returns showing depreciation claimed.
The 1031 conversation is more productive after your CPA reviews your specific basis and bracket. They may tell you the deferral is less meaningful than you'd assumed, or much more meaningful. Either way, get the number before you list.
“What would my total federal capital gains, depreciation recapture, state tax, and NIIT exposure be on a straight sale at [X] price?”
Create a free account to access all eleven items, the printable PDF, and a place to track your progress as you walk it through with your advisors.
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