Investing  

Should you buy an investment property or rental home?  - Investment Property or Rental Home Calculator

1031 Exchange Information create link



1031 Exchange - A 1031 tax deferred exchange allows you to defer capital gains by rolling-over all of the proceeds received from the sale of an investment property into the purchase of one or more other like-kind investment properties. At closing, proceeds are transferred to a third party, called a facilitator or qualified intermediary who holds them until they are used acquire the new property

Capital Gains - Usually the difference between the original cost and selling price of a capital asset, such as real property, after deductible expenses have been taken. Capital gain is subject to taxation

Foreclosures - Foreclosure occurs when the owner of real property fails to make payments on his mortgage and the bank or other secured creditor sells or repossesses the property

Marketing Your Rental -

Rental Property Tips -

How would you like to own a property at the shore and have someone else pay your mortgage for you. That is possible!

You can buy at the shore and rent your property out for the entire summer and even in the winter time, if you want. Rentals range in price according to their number of bedrooms and baths, location to the beach and boardwalk, amenities and condition.

What is a Tax Deferred Exchange?

A tax deferred exchange is simply a method by which a property owner trades one property for another without having to pay any federal income taxes on the transaction. In an ordinary sale transaction, the property owner is taxed on any gain realized by the sale of the property. But in an exchange, the tax on the transaction is deferred until some time in the future, usually when the newly acquired property is sold.


These exchanges are sometimes called "tax free exchanges" because the exchange transaction itself is not taxed.


Tax deferred exchanges are authorized by Section 1031 of the Internal Revenue Code. The requirements of Section 1031 and other sections must be carefully met, but when an exchange is done properly, the tax on the transaction may be deferred.
In an exchange, a property owner simply disposes of one property and acquires another property, rather than the sale of one property and the purchase of another.


Today, a sale and a reinvestment in a replacement property are converted into an exchange by means of an exchange agreement and the services of a qualified intermediary-a fourth party who helps to ensure that the exchange is structured properly.
The IRS' new regulations make exchanging easy, inexpensive, and safe. 


Internal Revenue Code (IRC) Section 1031 is one of the last remaining tax loopholes. It is a powerful tool that allows investors to exchange any investment property for any other investment property. For your exchange to be valid, you must follow specific IRS regulations.


Here is an abbreviated list of the regulations:

Why use a 1031 exchange: 

  • To defer your capital gains tax
  • To diversify
    • Exchange one property for a larger one.
    • Exchange one property for several properties.
    • Increase depreciation.
  • To simplify
    • Exchange several properties for fewer (or one) property.
    • Improve the quality of your property.
    • Decrease management responsibility
  • To relocate
    • Exchange for a property closer to where you live.
    • Exchange to an area with higher appreciation.

     

    Please consult your tax advisor

 

 

 


 


Templates in Time