Triple Net Investments LLC 
Triple Net Investments LLC  Glen R. Fotré, CCIM
Designated Broker |
Sec. 1031 EXCHANGES
Triple net leased properties are ideal replacement investments for those who are deferring Capital Gains Taxes through the use of an exchange. The typical rules for an exchange apply. In a 'forward' exchange, you must identify your replacement property(ies) within 45 days of close of escrow (the shortest 45 days of your lifetime - don't plan your vacation during that time) and close escrow on your replacement(s) within 180 days of close of escrow. A 'reverse' exchange allows your to close escrow on your replacement property(ies) before you sell your relinquished property, but recent rulings indicate that you must sell that relinquished property within 180 days of closing on your replacement property(ies). While you may not realize top dollar for your relinquished property, you will be able to acquire your top choice in a replacement property. An 'improvement' exchange will include a replacement property upon which improvements ordered by the exchangor (the taxpayer who is exchanging properties), are being made prior to close of escrow on the acquisition of that replacement property. The improvements need not be entirely completed prior to closing, however the value at the time of closing must equal or exceed the sale price of the relinquished property in order to entirely defer the gain. While it is best to defer the entire gain in an exchange, it may be more important to acquire the best property even if it means paying tax on a small portion of your gain resulting in a partially deferred exchange. Talk to your CPA about this. The advantages to the exchangor to acquire a NNN leased property to complete his exchange are many:
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