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National Real Estate Investor - August 2007
Real estate investors must be wise not only in choosing their purchases, but also in selecting the professionals who help them negotiate their acquisitions. That’s why the recent failures of two 1031 real estate exchange companies created a stir among some investors as well as experts in the business of transferring properties. (Read More)

 



Have You Heard About 1031 Exchange?

The Taxpayer Relief Act of 1997 which allows a single taxpayer a $250,000 exclusion from Capital Gains Tax on the sale of personal property. Married couples receive a $500,000 exclusion. The taxpayer must have resided in the property two of the last five years. This exemption may be used only once every two years. However the rules on taxation on income from investment property is quite different.

If an investor sells appreciated property, they pay taxes. However, property that qualifies for preferential tax treatment under Internal Revenue Code Section 1031 is treated quite differently. The tax code states "No gain or loss shall be recognized if property held for productive use in a trade or business or for investment is exchanged solely for property of like-kind."

In this special edition of my newsletter I try to address questions that you might have concerning IRS Code Section 1031. I reference information from Starker Services, Inc. "A National 1031 Exchange Intermediary". I hope that you find it beneficial.


The True Power of Exchanging…
Simply put, a 1031 exchange allows you to sell your investment/income property while deferring capital gains tax by reinvesting 100% of your equity into another property of equal or greater value.

The true power of exchanging is the ability to meet your investment objectives without losing equity to taxation. Known as leveraging, this method of acquiring real estate helps you purchase property many times the value of your initial investment.

The main requirement is that your property or business asset has been held for productive use in a trade or business, or for investment purposes, and be exchanged for like-kind replacement property.

Click her for more information>>


WHAT IS A TAX DEFERRED EXCHANGE?
WHAT IS A QUALIFIED INTERMEDIARY ?
SHOULD I CONSIDER AN EXCHANGE?

For the answers to these commonly asked questions and
more click here>>

Click here to calculate your capital gains tax.


It’s Important for Investors to Understand the Types of Exchanges Available…
Exchanging can range anywhere from a simultaneous exchange of two properties to a complex, multi-leg, multi-party transaction involving construction and/or reverse exchanges.  It’s important for investors to understand the different types so they know what is best for you.  Note, the vast majority of exchanges performed are delayed exchanges. 

  • The Simultaneous Exchange
  • The Delayed Exchange
  • The Improvement or Construction Exchange (Title-Holding Exchange)
  • The Reverse Exchange (Title-Holding Exchange)
  • Reverse/Improvement Exchange
  • Multi-Property and Multi-Party Exchanges
  • Personal Property Exchanges

Click here for Type definitions
     
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