5040 Tennyson Parkway
Section 1031 of the IRS Tax Code, properly structured, allows a taxpayer to sell a property, reinvest the proceeds in a new property, and defer all the capital gains taxes.
The IRS States:
“No gain or loss shall be recognized on the exchange of property held for productive use in trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in or trade or business or for investment.
Investors preparing for the sale of a property held for business or investment purposes should consider a 1031 exchange before selling their real property.
Many real estate investors eventually come to a point where they are no longer interested in actively managing the investment properties they own. TFR has many relationships with companies that offer investors the ability to execute a 1031 Exchange of their real property for interest in a Deleware Statutory Trust (DST) that requires no active management by the investor. Thereby affording the investor attractive income potential from their DST ownership without the burden of managing and maintaining an investment property.
If you would like more information about the 1031 Exchange process or to determine if your investment property may qualify to a 1031 exchange, please give us a call.
The IRS outlines several rules that must be followed for a transaction to qualify for tax deferral through a 1031 exchange. Rules address which types of real estate can be utilized for an exchange, how proceeds from the sale of the relinquished property must be handled throughout the exchange, how and when replacement property must be identified, and required timelines for closing on the replacement property.