Serving Ocala-Marion County and The Villages Ocala, FL 34471
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Can you do a 1031 Exchange?
Benefits of Exchanging: Increase equity, Increase appreciation, Consolidate assets, Diversify holdings, Relocate or increase investment, Dispose of poorly performing property, Increase net cash flow, Increase cash flow and financing opportunities, Receive "non-taxable cash", Increase depreciable property basis, Increase depreciable property basis, Estate planning and Conserve and compound and estate.
When to Consider and Exchange: The reason investors exchange property is simple: they want to legally defer paying tax on gain incurred by the sale of property. In an exchange, ownership is simply transferred from one real property asset to another like-kind real property asset. This then is treated under the tax code as a continuation of the ownership of the property rather than a taxable disposition.
The tax-deferred exchange of assets is not a "tax loophole," nor is it an unspoken privilege open only to wealthy investors. It is a method of equity preservation available to all taxpayers. The benefits extend beyond conserving capital assets. Just as the IRA account protects investor's savings from unnecessary taxation until the savings are converted to income, the IRS 1031 exchange shelters a property investor's increases in equity, leading to greater profits and economic growth and potentially increased retirement income.
What Property Qualifies: I.R.C. 1031 of the Internal Revenue Code reads "no gain or loss shall be recognized if the property transferred is actually exchanged for other like-kind (like-kind does not refer to the type of property. Instead it addresses the use of the property) property". The term "like-kind" is one of the most widely confused concepts by investors who erroneously think they must acquire a property exactly like their relinquished property. They are surprised to learn a wide variety of properties can be considered "like-kind".
Non Qualifying Property Under 1031:
Stocks, bonds, or notes, other securities or evidences of indebtedness or interest, (example: notes secured by deeds of trust)
Domestic property to foreign property
Stock in trade or other property held primarily for sale (inventory)
For more information call Crystal McCall
Keller Williams Cornerstone Realty
Serving Ocala-Marion County and The Villages
Direct Line 352-547-1077 Direct Fax 352-547-1078
Toll Free 800-391-8354 Ext 0
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