A staple of “trading up” in commercial real estate, we will explore how best to utilize 1031 exchanges and what they can do to increase your capital gains now and in the future.
MUST-HAVE STRATEGIES FOR REAL ESTATE INVESTORS. RELEVANT AND TIMELY INFORMATION THAT GIVES YOU THE EDGE.
A SIMPLE INTRO
In the simplest terms, this tool is used by both beginning and seasoned real estate investors to minimizes taxes when they look to transfer the proceeds from a sale. The investor then can use those same funds to purchase a property that is either the same price or higher in what is referred to as a “like-kind” transaction. Due to the IRC Section 1031 law, you can defer, sometimes indefinitely, the capital gains realized from past purchases of commercial property. This strategy is a brilliant way to keep gaining more property value for your portfolio while increasing your net worth. As the process may look simple on its surface, there are many ways to both facilitate and structure them in the most tax efficient way possible.
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THE PUZZLE PIECES INVOLVED
EXCHANGER – Investor that is involved in the 1031 exchange.
RELINQUISHED PROPERTY – Property that was recently or about to be sold to qualify for the 1031.
REPLACEMENT PROPERTY – Property considered to be a like-kind exchange property with the proceeds from the relinquished property.
QUALIFIED INTERMEDIARY – The firm or individual that will be assisting in the facilitation of the 1031 exchange.
RESTRICTIONS AND GUIDELINES
When considering a 1031 exchange, some stipulations are involved on how long it will take and when the property was sold as well as how the exchanger holds the funds.
USE THE BEST TOOL IN COMMERCIAL REAL ESTATE PROPERLY
If you have any questions on how best a 1031 exchange can work for your investment strategy, let’s talk today.
Contact Our Carmel Real Estate Attorney Today.
To schedule your no-obligation case evaluation about 1031 Exchanges, please contact our Indiana real estate attorney from our firm today!
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