1031 Exchange Facts
| STOCK MARKET FREAK I Make Ridiculous Amounts Of Money On The Stock Exchange Every Day! Ill Show You How. Read more |
The most important 1031 exchange information or
Like kind exchange info. Quickly gain a deeper understanding of section 1031
facts as defined by the Internal Revenue Code.
1.A 1031 exchange or Like kind exchange is defined by section 1031 of the
Internal Revenue Code.
2.This code specifies that if an asset, usually some form of real estate such
as land or a building, is sold and the proceeds of the sale are then
reinvested in a like kind of an asset then no gain or loss is recognized,
allowing the deferment of capital gains taxes.
3.This is an effective way to defer paying taxes that would otherwise have
been due on the first sale, for example – an investor bought a commercial
property, a strip mall, for $200,000.
4.This results in a gain of $50,000 and the investor would have to pay capital
gains tax on this amount.
5.However if he invests the $250,000 in another commercial real estate (like
kind – does not have to be a strip mall), then he does not have to pay any
taxes now i.e he defers his taxes till a later date.
6.When someone sells assets in tax-deferred retirement plans, the capital
gains that would otherwise be taxable are deferred until they begin to cash
out of the retirement plan.
7.The government loans money to pay for taxes that would otherwise be due
immediately upon sale of the real estate investment.
8.The loan is interest free and is not due until “cashing out” of the real
estate investments.
9.The QI sends required exchange documents to escrow closer for signing at
property closing.
10.Within the first 45 days after the close of escrow on the sale of the
relinquished property, investor identifies replacement property as required by
law.
