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  1031 Exchange


A 1031 exchange should be used by every investor. You want to talk to your lawyer or accountant to be sure you satisfy all the conditions properly and proceed correctly, but the 1031 exchange allows you to defer capital gains tax as long as your investment remains in property. Click this link to determine what you would pay in taxes on your capital gains if you were not to defer the taxes.

The 1031 exchange is one of the few remaining true tax advantages and is not commonly known to most real estate investors. There are also a lot of misconceptions about it being very difficult to qualify, when infact, it is for most real estate investors.

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  Under section 1031 of the Internal Revenue Code, a real property owner can sell his property and then reinvest the proceeds in ownership of like-kind property and defer the capital gains taxes. To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. The 1031 exchange can offer significant tax advantages to real estate buyers.

If you have real property that will net you a gain upon sale (generally property that has been substantially depreciated for tax purposes and/or has appreciated in fair market value), then you are exactly the person who should consider a 1031 exchange

  1.  The real property you sell and the real property you buy must both be held for productive use in a trade or business or for investment purposes and must be like-kind. (Like kind is defined much more generally than most would think - making this possible for most property owners).
   2. The proceeds from the sale must go through the hands of a qualified intermediary and not through your hands or the hands of one of your agents or else all the proceeds will become taxable.
   3. All the cash proceeds from the original sale must be reinvested in the replacement property - any cash proceeds that you retain will be taxable.
   4. The replacement property must be subject to an equal level or greater level of debt than the relinquished property or the buyer will either have to pay taxes on the amount of the decrease or have to put in additional cash funds to offset the lower level of debt in the replacement property.

Contact Barbara to find out more about this great opportunity often refered to as 'a tax free loan from the IRS'.


    
Barbara Humphrey
barbhumphrey2buy@bellsouth.net
 Barbara's cell 386.931.0535
Palm Coast Marketing of NY, Inc.
210 Old Kings Road South, Suite 600
Flagler Beach, FL 32136
       		   Palm Coast Marketing of NY, Inc. associate agent  
 
Joe Humphrey
Joe's cell 386.931.7466 
Palm Coast Marketing of NY, Inc.
210 Old Kings Road South, Suite 600
Flagler Beach, FL 32136

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