The 1031 Tax Deferred Exchange
Where Creativity & Investing Meet
As a wealth building tool for investors of all sizes, the 1031 Tax Deferred Exchange addresses one of life’s great mysteries: How to retain and maximize ones assets while being in full accordance with IRS Regulations. Investors can benefit from the power of a 1031 Tax-Deferred Exchange by deferring the taxes that would otherwise be incurred on an outright sale of their property. You can use your entire amount of equity from an exchange to acquire substantially more replacement property, now that’s an Aha Moment!
At JACE The Real Estate Company, our agents take specific and continued training in 1031 Tax Deferred Exchanges; we also offer public seminars on Tax Deferred Exchanges taught by experts in the field.
Properly structured and administered, an exchange becomes an invaluable tax-saving tool and an integral part of the investor’s strategy. Through exchanging, investors are able to meet their objectives without losing equity to taxation. This method of acquiring real estate helps investors purchase property many times the value of their initial investment.
JACE The Real Estate Company Realtors play a key role when we point out potential benefits of tax-deferred exchanges to our clients. Buyers or Sellers employ the services of an Exchange Intermediary at any point prior to the property closing escrow.
The main requirement is that property be held by the seller for use as an investment (not your primary residence) or a trade or business, and be exchanged for like-kind replacement property. Here’s the fun part: like kind replacement property means real estate, an apartment building may be traded for raw land and a rental house may be traded for a triplex, this is where all real estate is created equally.
Points to Ponder:
· You may not have to pay capital gains taxes on the sale of property if you plan to reinvest.
· The dollars you save in taxes allow you, as an investor, to purchase more real estate.
· There are strict time requirements of 45 days to identify the replacement property and 180 days to complete the entire exchange.
· Exchanges can range anywhere from a simultaneous exchange of two properties to complex, multi-party transactions involving construction and/or reverse exchanges. A qualified intermediary will help you decide what type of exchange is best for your specific needs.
· Your accountant and your attorney will be dazzled by your planning. Properly structured and administered, 1031 Exchanges may be an invaluable tax-saving tool and an integral part of the investor’s strategy.
If you ever wonder exactly how the rich keep getting richer, the 1031 Tax Deferred Exchange is one of the tools utilized. We at JACE The Real Estate Company are excited to help you build wealth through wise investments in real estate.