A REAL ESTATE INVESTOR’S GREATEST ALLY

 A properly structured exchange can provide investors with the opportunity to defer all of their capital gains taxes, with no limit on the number of times it’s used.  This results in what’s essentially an interest-free, no-term loan from the government.  Instead of paying taxes now, the investor can put those dollars to work in other investment properties. If you never “cash out,” you can defer taxes indefinitely.  Upgrade to a larger investment property without taking a tax hit when selling your smaller property. Sell a property in one market and buy a property located elsewhere.

 LIKE-KIND PROPERTY – WHAT QUALIFIES AND WHAT DOESN’T?

Your “Intention” in a 1031 Exchange is what matters to the IRS.  You must intend to hold the property for the purpose of renting, investing, or using in a trade or business. 

 IT’S A REAL ESTATE THING

Qualifying Entities include Individuals, LLC’s, Partnerships, Corporations, and Trusts.  Stocks, Bonds, and Notes do not qualify for a tax-deferred exchange.

 SMART STRATEGY – COMPLEX TO EXECUTE

1031 Exchanges are subject to strictly adhered to Timelines and Identification Rules.  The clock starts ticking the day you sell your relinquished property.  Deferring 100% of tax requires an understanding of how much you need to spend and borrow for a new 1031 exchange property.  Taxable Boot (cash gain or mortgage), Federal and State Capital Gains, and Depreciation Recapture are amongst many integral considerations when navigating a successful exchange.

 THE THREE PEOPLE YOU NEED IN YOUR CORNER

Real Estate Agent I Qualified Intermediary I Tax Advisor or Attorney 

The Preston Team – Expert Guidance