When you work hard for the money that you earn, you want to find ways to keep as much of it as possible, and avoiding paying excessive taxes. One of the most common places that people look to save some money on taxes is during a real estate transaction. If you were to undertake a typical real estate transaction, any gains that you realize from the sale of existing property that you own (“relinquished property”) will be taxed until you reinvest in another property (“replacement property”).
To protect against these taxes, the experts at 1031 Exchange Place can help you with a 1031 tax exchange, named after the section of the IRS code that allows you to defer the taxes on the sale of relinquished property, as long as you reinvest the gains in a 1031 like-kind exchange, or another property that is similar for its investment purposes. Essentially, since you are not realizing any income gains that produce cash to pay taxes from the sale of the original property, you won’t have to come up with the cash. Even if you exchange the property for a different type of investment—for example, selling vacant land and investing in an apartment building—your investment vehicle has not changed and therefore may not be subject to taxes.
There are several different taxes applied to property sales, which can add up to a lot of money if you are buying and selling real estate on a regular basis, or even if you just have a one-time real estate deal. Whenever you are thinking about selling real estate, the benefits of 1031 tax deferred exchange should be considered:
You have several options if you are considering this type of exchange, and no matter what kind of property you currently own or are considering purchasing, you can find it through a 1031 tax deferred exchange. By working with a Qualified Intermediary like 1031 Exchange Place, you can participate in:
The key to a successful 1031 tax exchange or a 1031 like-kind exchange is knowing and understanding all the rules that apply to the sale and acquisition of property. Working with 1031 Exchange Place gives you access to the most knowledgeable intermediaries in the business, providing options for your exchange and helping you get the most from your old and new real estate investments.