1031 Tax Deferred Exchange Explained

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

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

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

Benefits of a 1031 Tax Deferred Exchange

Several benefits befall any 1031 tax deferred exchange property owner, including:

1031 Tax Deferred Exchange Benefits

Deferred capital gains taxes

1031 Tax Deferred Exchange Benefits

Increased cash flow on a monthly basis is a strong possibility

1031 Tax Deferred Exchange Benefits

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

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

1031 Tax Deferred Exchange Benefits

Do away with the struggles of traditional rental property management

1031 Tax Deferred Exchange Benefits

Achieve your investment objectives

1031 Tax Deferred Exchange Benefits

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

1031 Tax Deferred Exchange Benefits

Consolidate your investment portfolio by electing a tenants in common exchange

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