These are the two major rules that apply to 1031 Exchanges according to the IRS:
1. The total amount of the purchase price for the replacement property must be at least “equal to or greater than” the total price of the relinquished property.
2. Any equity from the sale of the relinquished property must be used solely for the purpose of acquiring the replacement property, otherwise the remaining balanced will be taxed.
If either one of these two rules are violated, then the property owner will become liable for a portion of additional income taxes. There will always be an additional tax levied against the property owner in all cases where the replacement property price is less than the price of the relinquished property.
In cases where only a portion of the equity is used to purchase the replacement property, there will also be an additional penalty tax based on the percentage used. However, partial exchanges can still qualify as a 1031 Exchange. They simply result in a partial deferral of the capital gains.
Here is more information about 1031 Exchanges.
Of course it depends on the specific type of commercial loan you are applying for.
For instance; A Full Documentation Loan, a 1031 Exchange, or a Cross-Collaterization Loan might require more than a Commercial Mortgage Refinancing Loan.
Until we review your commercial loan application, we can’t determine all of the types of documentation that might be needed.
We recommend that you submit the application with as much information and documentation as possible. The first step is filling out the commercial loan application online here or choose the specific loan type or program from the drop down menus below for more specific details about the loan you need.
General Loan Types
Specific Loan Programs
Here are a few of the requirements that are most common to commercial loan applications.
- Completed loan application with individual, corporation or group name.
- Title of signor with address, phone number
- Stated income, asset liabilities, schedule of assets
- Down payment and source of funds
- Personal guarantee (if applicable)
- Seller carry-back information (if applicable)
- Address and legal description of subject property
- Other collateral or cross-collateral – with legal description/address
When applying for a commercial loan through Capital Direct Funding here, the only actual requirements are;
If more documentation is needed, the agent we assign to your loan will let you know after reviewing the application. However, the more information you provide to us, the easier it is to help you move your loan approval along quickly.
There are a lot of industry terms used when discussing finance.
At capital Direct Funding, we strive to simplify the process for you and help you understand the different types of loans and how they work.
Choose from the list below and follow the link to read more about each type of loan. If you need help, Call us at 1-877-273-7823
- Conventional Business Lending
- Commercial Stated Income Loan Programs
- Mezzanine Financing
- International Commercial Lending
- Corporate Business Lending
- 1031 Exchange
- Full Documentation Lending
- Commercial Cash Out Refinance Lending
- Commercial Business Loans
- Hard Money Commercial Lending
- Fixed Rate Commercial Mortgage Lending
- Commercial Construction and Development Lending
- Land Acquisition and Development Lending
- Commercial Equity Lending
- Commercial Renovations and Construction Lending
- Private Funding Programs for Joint Ventures
- Green Energy Lending
- Foreign National Lending Programs
- Cross Collateralization Lending
- Distressed Commercial Lending
- Commercial Bridge Lending
- Land Development Lending
- Office Building Finance