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1031 Exchange Explained

It is the IRS approved method that enables you to sell your income property income property and reinvest in another income property or income properties, deferring all federal (and most state) capital gains taxes. This transaction is authorized by internal revenue code and is one of the best options for property owners to rollover their investment income properties while preserving as much wealth as possible. By deferring any applicable taxes, the property owner has more money available to invest in other income property. In effect, you receive an interest free loan from the federal government in the amount you would have paid in taxes.

When combined with a 1031 exchange, tenants in common income properties can be even more attractive. 1031 Exchanges allow you to defer capital gains taxes by investing in a like income property. When using tenants in common income properties with a 1031 exchange, you can defer capital gains while diversifying your investments. You can purchase shares of various tenants in common income properties in different locales with the proceeds of the 1031 sale.

If you are considering the sale of an investment income property, contact a specialist today to discuss your 1031 exchange options.