Insights

CWS' blog shares insights and informative articles regarding real estate investing.

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Tax season is here and you may be receiving an influx of complex statements that reflect your investment activities. While many people have their accountants handle these papers, there is a benefit to understanding their significance. Among these documents, you may receive some versions of a Schedule K-1 form as a result of your activity in a partnership or an LLC, for example. These would likely be the last forms you receive, as they are required to be delivered to you by March 15.
 
Since a 1031 exchange can take up to 180 days, many exchanges are carried out over two tax years. The IRS will recognize the exchange—and any cash boot associated with it—in the year of the taxpayer’s choice, depending on the way the exchange is declared. Should the exchange fail, there are also ways to soften the consequences when the deal cuts across two years. The process is known as 1031 exchange tax straddling and it can be of great benefit to multifamily real estate investors.