Are you selling an investment property in Hawaii and wondering how to protect your hard-earned gains from heavy taxes? A 1031 exchange might be your most powerful tool.
Welcome to Island Dragonfly, where we specialize in crafting inspired real estate journeys for both local residents and international investors. In this video, I break down exactly how Section 1031 of the Internal Revenue Code allows you to defer tax when exchanging business or investment property for “like-kind” real estate.
Here is what you need to know about the two critical clocks of a 1031 exchange:
• Clock 1: You have exactly 45 days from the sale of your old property to identify a replacement in writing.
• Clock 2: You have 180 days to close on the new property.
• The Golden Rule: The transaction requires a Qualified Intermediary (QI) arranged before the sale closes—the funds cannot touch your hands.
The Hawaii Layer (HARPTA): If you are a non-resident seller, the Hawaii Real Property Tax Act (HARPTA) typically requires a 7.25% withholding of the closing price. However, a fully deferred 1031 exchange can qualify you for an exemption using Form N-289. The best part? Your replacement property doesn’t even have to be located in Hawaii!
Disclaimer: This video is for informational purposes and does not constitute tax advice. Always consult a licensed CPA.
Connect with me to schedule a complimentary property evaluation or strategic consultation:
🌐 Personal Agent Site: https://jasonwong.us
🌐 Brokerage Site: https://islanddragonfly.com
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