Capital Club Expert Insight on 1033 Exchanges with Brad Borden & Camille Renshaw
This episode of the Capital Club podcast dives deep into 1031 and 1033 exchanges. Our guests, Camille Renshaw, CEO and co-founder of B+E, and Brad Borden, a professor of law at Brooklyn Law School, provide expert insight into how these sections work and how they may apply in a business environment. They discuss differences between 1031 and 1033 exchanges such as types of property that can be acquired, time periods, use of proceeds, ownership restrictions, and much more. Tune in to learn more about 1031/1033 exchanges and get helpful advice from our knowledgeable guests!
Key Highlights:
[00:01 - 06:25] Opening Segment
- Understanding the difference between 1031 & 1033 exchanges
- Types of properties that can be acquired are different
- Camille’s experience with 1033 in both personal and business sense
[06:26 - 12:57] 1031 & 1033 Exchanges
- There are secondary markets across the country with industrial property in the middle of downtown
- 1033 exchanges allow property owners to reinvest proceeds from the sale within 2 years
- 1031 exchanges require a 45-day identification period and 180 day exchange period
- Why qualified intermediaries are involved in 1031 exchanges, but not in 1033 exchanges
[12:58 - 19:30] Navigating the Complexities of 1031 and 1033 Exchanges
- Under 1031, the replacement property must be like the relinquished property
- Under 1033, there is a similar or related in-use standard that is broader than 1031
- How people are fatigued after going through the condemnation process
[19:31 - 25:30] Leveraging Exchange Proceeds for Investment
- Often there are multiple family members involved in 1031/1033 exchanges
- Tech platform allows people to scour the whole market for net lease assets
- People want something less hands-on and less cumbersome than their previous investment profile
[25:31 - 32:07] Exploring 1031 and 1033 Exchanges
- What's allowable, not allowable, and what ownership structures
- Prepaid construction services and materials are not considered real property
- How ownership structures can be divided tax-free with partnerships
[32:08 - 39:39] Closing Segment
- Distributions of property from S corporations or C corporations will trigger gain recognition
- Get expert advice on complex tax issues
- It’s important to have communication between all parties involved in the transaction
Want to connect with Brad? Head to his website to learn more about complex property transactions and business restructurings!
Want to connect with Camille? Follow her on LinkedIn.
Key Quotes:
“I definitely encourage you if you are basing a 1033 or 1031 frankly, you won't find any better people than Brad or Camille in the business or industry.” - Brian Adams
Connect with me on LinkedIn!
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