1031 Tax Deferred Exchange
Making
A smart move
A tax-deferred exchange allows you to preserve your wealth through reinvestment in “like-kind” assets. It’s a powerful tool-a tool that can work to your financial advantage.
When you sell your interest in investment property, you may incur federal capital gains taxes and, in some states, state taxes as well. Your attorney, tax advisor, or real estate professional may suggest a tax-deferred exchange under Section 1031 of the Internal Revenue Code.
Section 1031of the Internal Revenue Code provides a remarkable opportunity to build wealth by deferring taxes. Within carefully defined limits, this section of the code permits you to carry forward the gains you have made on one property into another one, deferring capital gains taxes and, thus, allowing the full use of your equity in the acquisition. An exchange can be much more advantageous than the sale of one property and the purchase of another.
A tax-deferred exchange allows you to dispose of investment properties and acquire “like-kind” properties while deferring federal capital gains taxes.
“Like-kind” does not mean “exactly the same,” particularly with the exchange of real property. A single-family rental unit, for example, may be exchanged for other real property like a warehouse, retail center, office building, farm property, or even a leasehold interest in real estate of 30 years or more.
Bottom line: a tax-deferred exchange allows you to reinvest sales proceeds that would otherwise be paid to the government in the form of taxes.
The choice is yours. And with our help, so are the advantages.
For more information regarding the 1031 process please call
Rafael J. Fernandez, C.P.A., P.A. at 305-596-9026.
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the 1031 process step by step
[Step 1] Purchase Contract- relinquished property
[Step 2] Relinquished property exchange documents
[Step 3] Closing the relinquished property
[Step 4] Relinquished property proceeds and forms
[Step 5] Purchase Contract-replacement property
[Step 6] Replacement property exchange documents
[Step 7] Closing the replacement property
[Step 8] Keeping you informed and final reconciliation
