1031 Exchange Explained

Irs Section 1031 allows a property investor of commerical property to exchange commerical property and defer paying federal and state capital gain taxes (20%+ applicable state taxes) in the event that they purchase a like-kind commerical property. A tax-deferred exchange is a method by which a property investors trades one or more relinquished commerical properties for one or more replacement commerical properties of like-kind, while deferring the payment of federal income taxes and some state taxes on the transaction.

Completing a 1031 exchange with a tenants in common interest ownership in a commerical property allows property investors not only to defer their capital gains taxes, but to also upgrade their commerical property into larger, institutional-grade commerical properties. Essentially, 1031 exchanges allow property investors to use all of the proceeds from their sale as leverage to gain access to more valuable commerical property.

If you are thinking of transferring any commerical property, contact us today for more information on 1031 exchanges. A 1031 exchange permits 1031 property property investors to sell a commerical property and defer tax payments by reinvesting the proceeds into a like-kind 1031 property or commerical properties. A tenants in common is a form of ownership that permits participants to enjoy the rewards of commerical property ownership without participating in the ongoing management of a commerical property. A tenants in common exchange yields an inherent interest in commerical property and offers several benefits as a qualified 1031 exchange.

Performing a 1031 exchange allows property investors to use all of the proceeds from the initial sale of commerical property as leverage for entering into more lucrative commerical property deals. The advantages of entering into a tenants in common are increased cash flow and diversified investment portfolios while deferring capital gains taxes at the same time.

If you recently sold a commerical property or you're considering selling a current commerical property, we can match you with a 1031 realtor that can assist you in facilitating the exchange process.


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