1031’s in Real Estate
Under Section 1031 of the Internal Revenue Code, owners of real estate held for investment or use in a trade or business can swap their property tax-free for "like-kind" real estate. Exchanges are made for people wanting to stay invested in real estate, increase their leverage and to avoid paying hefty taxes upon the sale of property.
Reason to Exchanges
- Restoring Depreciation that will soon expire - by exchanging one property for another of greater value.
- To upgrade size and/or quality of investment. An exchange can be utilized to combine the equity of one or more properties into a larger singular investment.
- To change investment location. An exchange can be executed in anticipation of market
trends to maximize appreciation potential.
Companies like Cardea Real Estate are very good at 1031 explaines and can be a great source of information for such kind of transaction. It is not easy finding an estate agent who even has a clue what such exchanges are all about .That is why you need the assistance of a great real estate agent.It is a great idea to consult with your tax and financial advisors to determine if a tax deferred exchange is appropriate for your circumstances and compatible with your investment goals.All in all such transactions are great especially for high asset value individuals and are especially great for you taxes.
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