Are there reasons to exchange other than tax advantages?
Yes, there are many nontax reasons to exchange. For example, if you no longer like managing property, you can exchange your management intensive property for triplenet management free property, or exchange multiple smaller properties for one that can be professionally managed. Or, say your current property cannot be easily refinanced. You could exchange out of that property for a new property which could be refinanced more easily so you can take some cash out. Or, you might exchange to improve cash flow.
Other 1031 Exchange FAQs
What is 1031 Exchange?
A 1031 exchange is a method for deferring capital gains tax on a real estate transaction.
What is a qualified intermediary?
The IRS says if you touch the money you pay the tax. However, if you use a qualified intermediary to transfer the money from the sold property into the purchased …
more
Can I get legal or tax advice from an intermediary?
No, the IRS doesn't allow a person to act as both your qualified intermediary and your attorney or tax advisor. So work with your attorney and CPA to make sure your …
more
Can I avoid paying taxes forever?
Yes, you can. By simply following the 1031 exchange rules every time you sell one or more properties and buy replacement properties, when you die your estate escapes …
more
What exactly are the tax advantages in exchanging?
You can eliminate paying any capital gains taxes, and you can eliminate paying the even higherrate taxes on the recapture of depreciation you've taken on your …
more
Can I buy a new property before selling my old one?
Yes, you can buy a new property before selling the old property and still qualify it's called a "reverse" exchange. A qualified intermediary takes title to the …
more
