1031 Exchange

A 1031 exchange is a structured transaction that combines the sale of an old property with the purchase of a new property while making is possible not to have to pay taxes on the money. It is possible to sell property such as a home or business and buy mineral interests such as stocks in oil as the replacement property. Likewise minerals interests can be exchanged for real estate properties. However production payments do not qualify for the 1031 exchange as these payments are considered to be your payments for extracting the oil or gas from the ground otherwise known as your personal income. When you sell your oil property you will usually sell the equipment that is there as well. The IRS will typically allow a certain amount of equipment to be included in the exchange however normally it that amount is over fifteen percent the equipment will require its own exchange.

Equipment exchanges also have a different set of rules that must be followed. If you sell your oil property to purchase an office building in a 1031 exchange, you will be required to recapture the IDC or Intangible Drilling Costs that were previously deducted. When you are looking for to exchange your properties like this it may be wise of you to hire an attorney to help you with this type of transaction. An attorney will know and understand how all of these rules work and will be able to help you make this transaction as smooth as it can be for you. Before you start a 1031 exchange it would be best if you had a full understanding of how this process works. With the many rules and regulations there are that are associated with this type of exchange, it may be more complicated than you think it is. This is where the research you should conduct will come in to play as you will know what will be expected of you. If you are ready to do a 1031 exchange where you sell your commercial property to purchase an oil property you may want to research different oil companies that will have this option available.

This type of exchange can also be a great form of investment as the prices of oil are ever rising. This type of exchange can easily be started with just a simple phone call or email to an expert in this area. By contacting an expert in this field you will also be able to acquire any information you may need in order to make your final decision. If you have decided that you would like to do a 1031 exchange to purchase oil property but have not found the right oil company you may want to consider looking into Managed Petroleum. With the many different reasons there are to start investing in oil, you may want to consider making this transaction today. So, go ahead and get out of your dead end apartment owning and get into the oil business today, so go ahead and give this company a call today and see what they can do to help you get started.