1031 Exchange Explained

Internal Revenue Code allows a property investor of income property to exchange income property and defer paying federal and state capital gain taxes (20%+ applicable state taxes) in the event that they purchase a like-kind income property. A tax-deferred exchange is a method by which a property investors trades one or more relinquished income properties for one or more replacement income properties of like-kind, while deferring the payment of federal income taxes and some state taxes on the transaction.

Completing a 1031 exchange with a tenants in common interest ownership in an income property allows property investors not only to defer their capital gains taxes, but to also upgrade their income property into larger, institutional-grade income properties. Essentially, 1031 exchanges allow property investors to use all of the proceeds from their sale as leverage to gain access to more valuable income property.

If you are thinking of transferring any income property, contact us today for more information on 1031 exchanges.

Benefits of a 1031 Exchange

Several benefits befall any 1031 exchange property investor, including:

1031 Exchange Benefits

Deferred capital gains taxes

1031 Exchange Benefits

Increased cash flow on a monthly basis is a strong possibility

1031 Exchange Benefits

More money to put as a down payment on your new income property

Pick and choose the type and location of the replacement income property that best suites you

1031 Exchange Benefits

Do away with the struggles of traditional income property management

1031 Exchange Benefits

Achieve your investment objectives

1031 Exchange Benefits

The tax dollars saved through a 1031 exchange may be maximized to increase cash flow and overall net worth.

1031 Exchange Benefits

Consolidate your investment portfolio by electing a tenants in common exchange