The Internal Revenue Code includes a popular provision for real estate investors known as Section 1031. This part of the tax code allows the sale of an appreciated real property and the replacement of that property on a tax deferred basis.
The IRS allows you to exchange one property for another tax free because they see it as simply you moving your cost basis for tax purposes from one qualifying property to another. So what does such an exchange mean to you?
Tax deferred exchanging of some type has been a part off the Internal Revenue Code since 1921. Here are the most popular exchange approaches.
This is the most popular form of exchange in which you have a total of 180 days to complete the sale of a qualifying property and purchase of all replacements.
View VideoThere are times when circumstances dictate that you must buy before your sell. This is known as a reverse exchange and they include their own set of logistics.
View VideoAt times an Exchanger will need improvements to be made to a new property for it to suit their requirements. This is an improvement exchange.
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This comprehensive tutorial explains everything you need to know about 1031 exchanging from beginning to end.
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There are a handful of 1031 exchange oriented keys which experienced Exchanger always obey. Hear about them here.
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If you just have a basic 1031 exchange oriented question, check here. You'll probably find your answer within the FAQ list.
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It is important to understand how the math associated with a 1031 exchange can impacts your ownership. A completed 1031 exchange not only defers capital gain and depreciation recapture taxes, it also dramatically increases your buying power as well.
The IRS allows you to exchange one property for another tax free because they see it as simply you moving your cost basis for tax purposes from one qualifying property to another. So how does Fyntex ensure that your exchange will be processed safely and compliantly?
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