1031 Exchange Explained

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

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

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

Benefits of a 1031 Exchange

Several benefits befall any 1031 exchange property investor, including:

1031 Exchange Benefits
  • Deferred capital gains taxes

    1031 Exchange Benefits
  • Increased cash flow on a monthly basis is a strong possibility

    1031 Exchange Benefits
  • More money to put as a down payment on your new investment property

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

    1031 Exchange Benefits
  • Do away with the struggles of traditional investment property management

    1031 Exchange Benefits
  • Achieve your investment objectives

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

    1031 Exchange Benefits
  • Consolidate your investment portfolio by electing a tenants in common exchange



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