Did you ever miss an opportunity to use a 1031 exchange?

[Daniel Francoeur]

Sometimes the market is just right and you find a great buyer. You unload the property, because how can you pass the offer up. 
I've seen some owners sit on that cash, very happy with the profit, but don't end up taking advantage of a 1031 exchange or like-kind exchange (a rule in the tax code which lets you defer the gain on the sale if you are also purchasing a property in the same class - google search for a more comprehensive definition!).

One story I heard a few years back from a CPA, was of a client who had farmland in Oklahoma. This farmland had been in the family for generations. It was finally discovered that the land was located on top of an oil deposit!

They sold the land for a mix of property/cash making part of the sale eligible for a 1031 exchange.
BUT, they weren't alerted to this fact until a chance conversation over dinner with a VP of Tax friend of theirs. (Their first CPA hadn't flagged the opportunity)

Instead of having to swallow a huge TAX expense in that year, they were able to defer millions in tax liability.

Wondering if anyone has similar stories of finding out about the 1031 exchange just in the nick of time.
Or the flipside, missing out and learning a lesson for their next sale.

[Alex Olson]

@Daniel Francoeur A lot of sellers have missed out on the tax benefits of a 1031 exchange either because they didn't know about it or they had bad advice from a CPA that didn't understand the rule. It it's basic form - the rule is that you must hold all funds from your sale (at closing so you never touch the money) by a qualified intermediary. At that point you have 45 days to identify up to 3 properties (I recommend identify 3 properties - no more no less) that are equal or greater in value (sold price) than the property you just sold. That's the basics - yes there are more details about it and different strategies but if you are like me, keeping it as simple is possible is the key to ensuring success your first time around.