As many real estate investors know, the 1031 exchange process can be complicated. At Attorneys Realty, we understand the rules and ensure that the ownership structure and property transfer comply with the current rules under IRC Section 1031, while we leverage our vast network to secure an appropriate 1031 exchange property for you.
A 1031 exchange allows an investor to defer capital gains tax by reinvesting proceeds from a sale of one qualifying property into another. For most real estate exchanges, the taxable gain is due to a combination of the appreciation in value and the amount of depreciation taken over the period of time that it was owned by the client. By using the 1031 exchange, the investor benefits from a huge tax deferral. It’s like a “tax free loan from the government” when using a 1031 exchange creating a stronger buyer position for the purchase. This results in the ability to increase buying power on a replacement property, which in turn facilitates significant portfolio growth and increased return on investment.
Because this transaction is considered an exchange as opposed to a simple sale, the taxpayer has a specific timeline in which to identify the like kind property and consummate the 1031 exchange. Specifically, one has only 45 days to identify the replacement property following the closing of the sold property and 180 days from the date of the sale of the original property to close the sale of the replacement property.
Attorneys Realty has the experience to assist you in efficiently executing your 1031 exchange transaction. Given the stringent time and other constraints of the IRS regulations, it is imperative for you to work alongside an experienced and legal-focused broker who can provide you with many like kind property options and ensure a smooth execution into your next 1031 exchange investment property.
Contact us today for a free consultation and learn more about what the team at Attorneys Realty can do for you!