The best thing about Section 1031 is that its benefits are available to large, medium, and small investors. The general misconception is that this section only provides opportunities to defer taxes on capital gains for owners of large commercial properties. But the fact is that if one has a qualified intermediary, then all kinds of investors can benefit from this section.
There is no dearth of real estate firms that provide an exhaustive list of 1031 properties. These firms generally also provide the services of a qualified intermediary. There are “simple gains” calculators available on the Internet that can help one to calculate the capital gains tax one would be able to save through the tax exchange transaction of a real estate property. Over the last one and one-half decades, there has been a phenomenal growth in transactions that qualify under the tax exchange laws. The IRS has also tried to make things easier by simplifying this law and plugging loopholes. Those who have lost out on the opportunity of utilizing this provision to save taxes can attend any of the seminars, which are regularly held in various cities to explain how to avail the opportunities under this section.
Prior to 1990, this section was quite complex and difficult to understand. But now, an individual can easily make out how this section operates. It is still advisable, however, that before you go for exchange you should consult your attorney or a qualified intermediary. There are certain issues pertaining to the partnerships, tenants-in-common, and transaction between spouses that need to be taken care of before you make a final decision.
However, large numbers of properties are now available in the markets that qualify under this section, and there are several firms that are exclusively dealing with the sale and purchase of such properties.
Related Articles of Interest :
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1031 Tax Exchange
10 August 2010 8:30 PM |
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Tax Exchange refers mainly to Section 1031 of the Internal Revenue Service Code. It is also known as “1031 Tax Exchange.” This section outlines the tax status of “like-kind” real estate exchanges. It helps one in structuring the sale or disposition of real estate (including...
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1031 Tax Exchange Laws
10 August 2010 8:30 PM |
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There are certain rules that must be followed while carrying out the exchange under Section 1031 of IRS. The first and the most important rule is that the assets that are going to be exchanged must be of “like kind.” Secondly, the sales proceeds of...
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1031 Exchange Rules
10 August 2010 8:30 PM |
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In a 1031 Exchange an investor sells his property, called “Relinquished Property,” to acquire a “Replacement Property” without attracting tax on capital gains. The whole exchange is overseen by a Qualified Intermediary (QI), a middle-man who provides services of paperwork, oversight, escrow and expertise to...
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1031 Tax Exchange Forms
10 August 2010 8:30 PM |
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There are several forms that are required to be filled while carrying out transactions under Section 1031. Some of the important forms include IRS Form 8824 for like-kind exchanges and IRS Form 4797 for the sale of business property. There are several agreements that need...
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1031 Property Exchange
10 August 2010 8:30 PM |
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Property Exchanges conforming to IRC section 1031 offer wonderful opportunities to defer tax liability and maximize profits while helping to continue with the investment of the capital. The IRC clearly states the main qualifying parameter of the exchange as a like-kind exchange. “In a like-kind...
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1031 Exchange
10 August 2010 8:30 PM |
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Section 1031 in the Internal Revenue Service is a boon for a prospective investor, selling an investment property and wanting to make a profit by reinvesting in a similar property elsewhere in the country. This wonderful concept works on the principle of gain rolling from...
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1031 Exchange Services
10 August 2010 8:30 PM |
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In a 1031 Exchange, the main services come from a qualified intermediary (QI), also known by names like facilitator or accommodator. The services are offered on fee-for-service basis. The services from the QI include paperwork, oversight, escrow services and making a bona-fide exchange agreement under...
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1031 Exchange Experts
10 August 2010 8:30 PM |
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As far as the 1031 Exchange is concerned, it is the Qualified Intermediary who can be called the top “expert” who makes or breaks the deal. The role of the QI is crucial to completing the exchange successfully. It is he who acts as the...
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1031 Exchange Companies
10 August 2010 8:30 PM |
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The easiest method to begin a 1031 Exchange transaction is to contact a good Exchange Company. The information concerning the exchanger, time and place of the closings, and a copy of the contract to sell the relinquished property are the preliminary papers to start the...
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1031 Exchange Requirements
10 August 2010 8:30 PM |
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In a 1031 Exchange, the primary requirement is meticulous planning on the part of the exchanger. The preparedness involves talking to the accountant, attorney, broker, lender and a Qualified Intermediary, the legally mandated middle-man who carries out the exchange process until completion. First of all,...