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If I sell my business, can I use the cash funds as a 1031…

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If I sell my...

If I sell my business, can I use the cash funds as a 1031 exchange and buy into an IRA?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I'm trying to avoid too much tax liability if/when my business sells. Can the cash be put directly into an IRA?

Accountant's Assistant: Is there anything else the Accountant should be aware of?

I will receive a cash down payment (probably under $300,000) and the rest paid in installments. With the cash down payment I do not want to buy real estate; can I just put the money into a retirement fund/IRA?

Submitted: 9 months ago.Category: Finance
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12/7/2017
Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 9 months ago
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional
Category: Finance
Satisfied Customers: 2,879
Experience: IRS Licensed Enrolled Agent, CDFA ® CFP ®, MBA
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Welcome to JustAnswer!

My name is ***** ***** I will be able to assist you today.

To qualify for a 1031 exchanges the exchange must consist of "like-kind," property. For example, a commercial building for a commercial building.

___

Since you are selling your company, you would be able to contribution to a retirement account including an IRA. For example SEP IRA's you are able to contribute up to $54,000 for 2017 or 25% of your compensation, whichever is lesser.

___

Given the scenario you outlined above you would generally be able to contribute $54,000 from the sale of your business that is received as compensation or net earnings from self employment.

Below is a link to IRS.Gov which verifies the information I have provided above.

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-contributions

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Financial Professional: Chad EA, CDFA®, CFP®, CERTIFIED FINANCIAL PLANNER ®, Professional replied 9 months ago

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