Why Consider a 1031 Real Estate Exchange Specialist?

There are many advantages to structuring your transactions as a 1031Real Estate Exchange Specialist

  • Defer taxes (Up to 35-40%of the gain)
  • Greater purchasing power
  • Improve cash flow
  • Diversify or consolidate a real estate portfolio
  • Build & preserve wealth
  • Switch property types
  • Expand into other real estate markets nationally

1031 Real Estate Exchange Specialist provides a complete service to successfully  accomplish 1031 exchanges.

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Exchange Services

The fundamental advantage of a tax deferred exchange may be utilized to diversify, consolidate or leverage your investment portfolio.  With respect to real property, the broad definition of “like kind” provides investors with numerous options to accomplish their investment goals.

Property That Qualifies for IRS Section 1031 Treatment

IRS Section 1031 provides that to qualify for tax deferred treatment, the relinquished property must be exchanged for replacement property that is like kind which means similar in nature and character notwithstanding differences in quality or grade.  The fact that any real estate involved is improved or unimproved is not material to the exchanges.  As such, raw land held for investment may be exchanged for single family rentals used for a trade or business or any combination of the following:
  • Single Family Rentals
  • Farms/Ranches
  • Offices/Commercial
  • Motel/Hotels
  • Golf Courses
  • Some Recreational Properties
  • Multi Family Rentals
  • Raw Land
  • Rental/Industrial
  • Leasehold interests of 30 years or more

While the definition of “like kind” is stricter when it comes to personal property, investors may still take advantage of tax deferred treatment in an IRS Section 1031exchange in the sale of investment personal property. The personal property exchange can be utilized to relocate a business, to upgrade equipment, or to streamline production by replacing outdated technology and machinery with more efficient models.

Like Kind Properties Include:

  • Livestock of the same sex
  • Automobiles for Automobiles
  • Buses for Buses
  • Doctor Practice for Doctor Practice
  • Manufacturing equipment for manufacturing equipment

Section 1031-Tax Deferred Like-Kind Exchange of Property Held for Income, Investment or Business Use.

Section 1031 of the Internal Revenue Code (“1031 Exchange”) provides that real property held for rental, investment or use in a business (“relinquished property”) can be exchanged for “like-kind” real property also held for rental, investment or use in a business (“replacement property”) allowing the Investor to defer his or her Federal, and in most cases, state income tax liabilities.

It is important to note that 1031 exchange transactions are tax-deferred exchanges–not tax-free exchanges– as many authors and advisors frequently refer to them. The Investor’s capital gain and depreciation recapture tax liabilities are merely deferred–and can be continually and indefinitely deferred— into like-kind replacement properties acquired as part of a series of 1031 exchanges transactions.

The tax deferral benefits of the 1031 exchange allow an Investor to sell, dispose or convert real property without reducing his or her cash position by paying capital gain or depreciation recapture taxes. This provides the Investor with the continued liquidity necessary to increase his or her real estate portfolio by trading up in value and ultimately increasing his or her net worth by improving cash flow and capital appreciation from the portfolio.

A Qualified Intermediary is required when completing a 1031 exchange transaction. Section 1031 of the Internal Revenue Code applies to personal property as well as real property.

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Frequently Asked Questions

WHY A 1031 EXCHANGE

A 1031 Exchange is a powerful tax-deferment strategy allowing you to change the form of your investment without cashing out or recognizing a capital gain. That allows your investment to continue to grow tax deferred. 2017 is the optimal time to exchange properties in expensive markets for cash-flow properties across the country.