There are a wide range of benefits that come with conducting a 1031 exchange, but many people don’t know how to get the ball rolling. In this article, we are going to talk about how to take advantage of the tax-saving benefits of section 1031 of the Internal Revenue Code.
Deferring Taxes on the Sale of Qualifying Real Property
First, let’s talk about the fundamentals of section 1031. A like-kind exchange (also known as a 1031 exchange) is an alternative to an outright sale of property in which you exchange your current property for a replacement property. This allows you to defer your capital gains tax burden on the sale, but you must move all of your sales proceeds into a new replacement property rather than pocketing those funds.
This can result in potentially massive tax savings as you keep your money working for you in a continued investment.
A Qualified Intermediary Can Help
A qualified intermediary is your ticket to a successful 1031 exchange. They act as the neutral third party during the transaction and hold your funds to make sure you never receive any cash boot during the transaction. They can also answer your questions and prepare the appropriate documentation for the transaction.
Take Advantage of the Tax-Saving Benefits of a Like-Kind Exchange
If you’re selling investment real estate, take advantage of the tax-saving benefits section 1031 of the IRC and exchange your property in a 1031 exchange! There are many benefits of conducting a 1031 exchange of real estate – chief among them is capital gains tax deferral. A qualified intermediary at CPEC1031, LLC can help you make sense of the many rules and requirements of section 1031 and make sure you are set up to execute a fully deferred 1031 exchange of your real estate.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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