1031 Exchange Explained

IRC Section 1031 allows a property owner of investment property to exchange investment property and defer paying federal and state capital gain taxes (20%+ applicable state taxes) in the event that they purchase a like-kind investment property. A tax-deferred exchange is a method by which a property owners trades one or more relinquished investment properties for one or more replacement investment properties of like-kind, while deferring the payment of federal income taxes and some state taxes on the transaction.

Completing a 1031 exchange with a tenants in common interest ownership in an investment property allows property owners not only to defer their capital gains taxes, but to also upgrade their investment property into larger, institutional-grade investment properties. Essentially, 1031 exchanges allow property owners to use all of the proceeds from their sale as leverage to gain access to more valuable investment property.

If you are thinking of transferring any investment property, contact us today for more information on 1031 exchanges.

Benefits of a 1031 Exchange

Several benefits befall any 1031 exchange property owner, including:

1031 Exchange Benefits

Deferred capital gains taxes

1031 Exchange Benefits

Increased cash flow on a monthly basis is a strong possibility

1031 Exchange Benefits

More money to put as a down payment on your new investment property

Pick and choose the type and location of the replacement investment property that best suites you

1031 Exchange Benefits

Do away with the struggles of traditional investment property management

1031 Exchange Benefits

Achieve your investment objectives

1031 Exchange Benefits

The tax dollars saved through a 1031 exchange may be maximized to increase cash flow and overall net worth.

1031 Exchange Benefits

Consolidate your investment portfolio by electing a tenants in common exchange