Section 1031 exchanges. If you’re reading this blog, you may not even know what a section 1031 exchange is. Section 1031 is a section of the federal tax code that allows property owners to exchange one property for another and to defer the taxes on it (not get taxed immediately upon exchange). It can be a very powerful tool. However, this blog isn’t about Section 1031 exchanges.
I want to use it as an example of how planning can bring unexpected benefits.
I was recently speaking with Holly Signorelli, www.themoneytherapist.com/ on a video interview, and we were talking about plans and some of the common failures we’ve seen in planning and issues we’ve seen good hardworking successful private business owners make. As we were talking, she raised the topic about some of her real estate investors and structuring. A lot of times, people had missed the opportunity to use Section 1031 exchanges in their planning. They missed a very powerful tool in their planning arsenal. And why? They didn’t involve others in their plan. They lost huge tax benefits because they didn’t know they existed, because their plan wasn’t fully developed, because their plan wasn’t vetted with others.
There are countless other examples of opportunities missed such as exits of the company to different buyers, different trajectories companies could be on, and missed sales opportunities. All because of a lack of planning and a lack of execution. None of us know it all. We’re all human, and we all have blind spots. We suggest using planning and collective enterprise management with a team of inside and outside advisors to make sure that we are all working on the same page, so that we’re all moving forward and to make sure that we’re not missing any huge opportunities.
Planning can be your best friend. In The 3 Laws of Empowerment (www.rshawnmcbridelive.com), we talk about preparing, planning and protecting. Three very simple principles to underlie how you make decisions, but each step needs to be done very carefully. With the right planning, you can make sure you get to the right place, that you don’t miss opportunities.
How carefully have your plans been vetted? Are you missing some opportunities? Do you know where your blind spots are? Let us know in the comments below.
Planning brings unexpected benefits.
Don’t miss opportunities and plan.
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This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique. Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. Freeimages.com/photographer typofi.
About the Author
Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment (www.rshawnmcbridelive.com), gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can reach R. Shawn McBride at firstname.lastname@example.org or (214) 418-0258.
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