The 1031 Exchange Opportunity

1031 Exchange Opportunity

SELLING?

READ THIS BEFORE YOU DO

KEEP THE PROFIT FROM YOUR COMMERCIAL & INVESTMENT PROPERTY WHEN YOU SELL

How to Keep More Money

DEFER TAXES, DEFER, DEFER……..
Accelerate Depreciation, Accelerate, Accelerate…….

It's a basic fact that the large tax burden that often accompanies the sale of an investment property can be a troubling issue for many property owners. You’re looking at Federal Capital Gain Taxes, State Taxes and Depreciation Recapture. This can sometimes take up to 40-50% of your profit!

Thankfully, Section 1031 exchanges of real estate have long been a favorite tax-deferral tool for owners. This tax burden can be removed and deferred through an Exchange of real estate, effectively trading one investment property for another. The 1031 Exchange offers a great solution for those needing to defer the tax that arises with the sale of investment real estate.

Real Estate owners can accomplish virtually any investment objective with 1031 Exchanges. Some of the benefits include greater leverage, diversification, improved cash flow, geographic relocation, and/or property consolidation. Most families that have created generational wealth in real estate have done so by taking advantage of the 1031 Exchanges in the sale of their properties. If you are involved with investment real estate in any capacity whatsoever - whether experienced or a novice - you'll find the information offered at this site to be a powerful resource.

"No gain or loss shall be recognized on the exchange of property held for productive use in a 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 a trade or business or for investment."

- taken from Section 1031 of the Internal Revenue Service Code of 1986

Tax-deferral strategies are a great way to minimize taxes, and cost segregation and IRC section 1031 exchanges are two of the most valuable tax-deferral strategies available to commercial real estate owners today.
New guidance from the IRS and some of the most taxpayer-friendly legislation since the Tax Act of 1986 have made a second form of income tax deferral—cost segregation—increasingly popular.

The primary goal of cost segregation is to identify building components that can be reclassified from real property to personal property. This results in a substantially shorter depreciable tax life and accelerated depreciation methods. It takes property from a 39 year depreciation schedule to a 5,7 or 15 year schedule. I am sure you can see how this can drastically increase cash flow and reduce taxable income.

Cost segregation and 1031 exchanges are the most valuable tax planning strategies available to investment property owners today. Both of these tax-deferral techniques can be used on the same property in order to obtain the maximum tax benefits.

The average cost segregation study identifies 25% to 45% of a property’s basis that is eligible for faster depreciation.

It takes a unique combination of engineering and tax expertise to properly analyze construction information, compute industry-standard estimates and identify and segregate the sub-component costs of the building needed for cost segregation

Learn How to Optimize the Interaction between Cost Segregation and 1031 Exchanges and discover how to reduce taxes and dramatically increase your cash flow.

By learning how the tax rules work, building owners can significantly decrease their tax payments through accelerated depreciation thus keeping more money in their pocket. In order to use both strategies on the same property, taxpayers must not only understand whether the properties are like-kind, but also navigate around the depreciation recapture rules. Let us guide you though this.