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REAL ESTATE INVESTING
S.W. Florida is growing in National
reputation as a second
home, retirement and
investors real estate location.
Contrary to popular perception, the second home market
is not reserved for
the super
rich.
Many second home buyers are finding that their purchases
are
some of the best real
estate buys they make...
Also waterfront lots are an excellent investment.
Many have bought lots
making use of the information available through my mapping program. Some
Buyers have even
doubled their money in 6 months.
** The
crucial factor is to know where to invest
-
whether a second home or a
waterfront lot.
Information about 1031 Real Estate Exchange
Capital Gain Tax Information
Under normal circumstances, when you sell a property you have to pay tax on the
gain. Gain is caused by taking depreciation deductions for tax purposes or by
the property appreciating in value during its ownership.
A Section 1031 tax deferred exchange, named for the Internal Revenue Code
Section it refers to (also known as a Starker Exchange, Tax Free Exchange, or
Like-Kind exchange), allows an exception to the real estate capital gains tax.
When you sell your business or investment real estate, replace it with a
different business or investment property, and complete a 1031 exchange, you can
defer payment of the capital gains tax normally required on these sales. You can
also avoid capital gains tax on rental property capital gains tax.
If your plans include using the money from the sale of a business or investment
property to buy more of the same, a 1031 real estate exchange provides greater
proceeds for your next investment-more than you could gain through the
re-investment of after-tax proceeds.
A 1031 and the Capital Gain tax rule is not a tax loophole. It is a section of
the Internal Revenue Code, written by Congress, to allow anyone who meets all
the requirements to sell their property and defer paying taxes on the gain.
Understanding the Capital Gains Tax Rule and Avoiding the Capital Gains Tax
All relinquished (old) and replacement (new) property must be vacant land,
rental property or property used for trade, business or investment. The property
must be held for at least a year and a day to qualify for a 1031 Exchange. If
the properties meet these requirements, you may exchange any real estate for any
other type of real estate.
You cannot have actual or constructive control of any of the proceeds received
from the sale of the old property. By law, all money is held by a Qualified
Intermediary (also referred to as an Accommodator or Facilitator). You cannot
have an associate or employee, your attorney, broker or CPA hold the proceeds,
nor can you leave the proceeds in escrow until the second property is purchased.
You have 45 days from the date of closing on the old property to identify a list
of properties, from which you will purchase the new property.
From the date of closing, you have 180 days to close on one or more of the
properties from your 45-day list.
The titleholder on the old property must be the same titleholder on the new
property.
You must reinvest all cash proceeds from the sale, and purchase a new property
or properties of equal or greater value, in order to avoid taxation on the
gains.
We can help you with your 1031 Exchange please feel free to contact us.
I can show you where to find these properties.
If I
can not find
it, then it doesn't exist!
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Donna
M. Bishop