1031 stretchout - what is this?

I have seen websites touting this, some stating "convert almost any appreciated capital transaction into a deferred sale. Take 100% of the income or let the principal grow for your family's future benefit."
What is this thing? Legit?
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Reply to
Taxed and Spent

Not as far as I'm aware. It used to be that section 1031 applied to most investment assets other than shares of stock. But now it only applies to real property.
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Stu 
http://DownToEarthLawyer.com
Reply to
Stuart O. Bronstein

The rules are complex and the timelines for actions are strict. But basically if you have a piece of property you use for business or investment, and want to sell it to put that money into another property for business or investment, you can defer any capital gain. You can read all about it in the instructions to Form 8824:
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Stu 
http://DownToEarthLawyer.com
Reply to
Stuart O. Bronstein

yes, I understand 1031 exchanges. But this seems to be something "different". Maybe a gimmick, but I cannot tell from the "advertising" statements made on the couple of websites I have seen.
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Reply to
Taxed and Spent

I can't think of anything else. The only other way I can think of to defer capital gains is an installment sale. But that wouldn't fit the ad's promise to "Take 100% of the income or let the principal grow for your family's future benefit."
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Stu 
http://DownToEarthLawyer.com
Reply to
Stuart O. Bronstein

yeah. the websites (you can google "1031 stretch" to find a couple) make it so you have to contact them to get the real info.
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Reply to
Taxed and Spent
I found the term "1031 Stretchout?" on a website for a group named FTI.
Out of politeness, I won't suggest what the initials "FTI" might stand for.
You don't want any part of this. Trust me.
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Reply to
lotax

I agree. From what I can tell, you sell your asset to someone on an installment sale over an extended period of time. Any real profit is likely only on paper, with a good chance of losing most of your investment. It's like if you gave your property to Bernie Madoff and he told you it was a good investment.
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Stu 
http://DownToEarthLawyer.com
Reply to
Stuart O. Bronstein

That is sort of what I was thinking. Always like to learn the details of such scams, though. Like watching a train wreck - we just can't avert our eyes.
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Taxed and Spent

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