Section 1031 — 1031 Exchange of Property Held for Investment
Section 1031 of the Internal Revenue Code ("1031 Exchange") provides that property held as rental or investment property or property used in your business ("relinquished property") can be exchanged for "like-kind" property also held as rental or investment property or property used in your business ("replacement property") allowing you to defer your Federal, and in most cases, state capital gain and depreciation recapture income tax liabilities.
It is important to note that 1031 Exchange transactions are tax-deferred exchanges — not tax-free exchanges — as many speakers, authors and advisors frequently refer to them. Your capital gain and depreciation recapture income 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 Exchange transactions.
The tax deferral benefits of the 1031 Exchange allow a 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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If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
Section 1031 — 1031 Exchange of Property Held for Investment
Section 1031 of the Internal Revenue Code ("1031 Exchange") provides that property held as rental or investment property or property used in your business ("relinquished property") can be exchanged for "like-kind" property also held as rental or investment property or property used in your business ("replacement property") allowing you to defer your Federal, and in most cases, state capital gain and depreciation recapture income tax liabilities.
It is important to note that 1031 Exchange transactions are tax-deferred exchanges — not tax-free exchanges — as many speakers, authors and advisors frequently refer to them. Your capital gain and depreciation recapture income 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 Exchange transactions.
The tax deferral benefits of the 1031 Exchange allow a 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.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125