Investing in Real Estate?
Maybe a 1031 tax-deferred exchange is in your future!
A tax-deferred exchange is a method by which a property owner trades one or more relinquished properties for one or more replacement properties of "like-kind," and deferring the payment of federal income taxes on the transaction. Section 1031 of the Internal Revenue Code provides for no gain or loss to be recognized on the exchange of property held for productive use in a trade or business, or for investment.
So if you are reinvesting your real estate investment sale proceeds into another property, the economic gain has not been realized in a way that generates funds to pay any tax. In other words, the taxpayer's investment is still the same, only the form has changed. This is a deferral, not a tax-exeption so when the repacement property is sold, the taxes, plus gains, are due.
Is a 1031 tax-deferred exchange right for you?
Contact me so we can explore your options.
Wish it were that easy!
