Finance Nook Logo

1031 Exchange Escaping the Certainty of Taxes

By Expert Author: Dave Carter
Word Count: 394 words | Views: 1841 view(s)
‘In this world’, said the great Benjamin Franklin, ‘nothing is certain but death and taxes’. While modern medicine continues to work on a cure for mortality, 1031 exchanges offer a valuable mechanism against the foibles of the taxman. Allowing the exchange of one property for another, this property market trend can help you hold on to money that might otherwise end up with the IRS. How do you know whether you are eligible to take advantage of this great property trend?

The first stipulation is that the two properties involved in the swap be in use for ‘trade or productive purposes’, that is that they are moneymaking concerns of some kind, such as a rental property or holiday home. The property intended for swapping must also reside in the US, though it can be located at any point within.

1031 exchanges necessitate the involvement of what are known as Qualified Intermediaries, who deal with the paperwork involved in the switch, and assume a role akin to a property purchaser. The property to be exchanged is handed over to this intermediary, until the property owner locates a new property, at which point the switch can be made.

This type of property exchange operates under strict guidelines and an exacting timetable. Once the original property is sold, a list of possible replacements must be supplied to the intermediary with forty-five days, while the exchange itself must be completed within one hundred and eighty. The title to both properties must remain intact throughout the entire process, so this is not the time to dissolve any business partnerships that might be involved. Any deviance from these strictures can threaten the entire exchange process.

The properties to be exchanged must also be what is described as ‘like-kind’, meaning that they are roughly comparable. This does not mean that the two properties must echo one another entirely, it simply refers to the fact that the property relinquished and the one to be taken up must both be suitable for use in a similar business or investment related way.

1031 exchanges are not for use on residential homes, and so, for many people, are of little value. But if you own a business property and would like to move premises without losing a sum of money to the taxman, then a 1031 exchange might just be the right choice for you.
About the Author/Author Bio

Dave is the owner of http://www.1031-exchange-explained.info and http://www.1031-exchange-specialist.info websites providing information on 1031 exchanges.

Article Source: http://www.financenook.com/Article/1031-Exchange-Escaping-the-Certainty-of-Taxes/16564

This Article has been viewed 1841 times.

Related Videos

Real Estate Marketing Tips - Part 1
Real Estate Marketing Tips - Part 3
Real Estate Investing Tips - Trends Part 3
Real Estate Investing Tips - Trends Part 2
Real Estate Investing Tips - Trends Part 1
 

More "Commercial Real Estate" Related Articles

 
 

Listed below are more articles related to the above article from the "Commercial Real Estate" article category.

People interested in the above article "1031 Exchange Escaping the Certainty of Taxes" are also interested in the related articles listed below:

 
Today everyone is looking for the easiest way to learn for how to buy commercial properties. Most people keep asking as what they should do, so that they can buy their commercial property. Well the answer to all such questions could be that: you should be aware of all the rules and regulations of the game. By becoming a commercial mortgage broker, you can solve a lot of your problem while buying a commercial property for yourself.
Most of us have looked at a piece of property at some location and have thought something along the lines of, “If only I had known that the prices would go up that much, I could have bought that property and would be rich today”. While this is generally a true statement, the fact is that the property often takes a large initial investment in the first place, depending of course on the location and on the size.
Turning the television world flat on its head, The Flintstones became the first animated hit series in prime time history. Set in the Stone Age town of Bedrock, the show explored the lives of ancient cave dwellers through the lens of a modern lifestyle, with bird beaks acting as phonograph needles, elephant trunks as vacuum cleaners, and fireflies as light bulbs.
This article will help to explain some of the benefits of purchasing and financing real property as a business in opposition to financing through unsecured lines. Commercial real estate and financing can offer tax and other benefits to a business owner.
Have you gone to a shopping complex? There, you will see different novelty shops, grocery stores, and other small businesses. If you will decide on whether you want to enter such business, it is important that you will understand the basics of commercial real estate investment and how you can gain profit from real estated investing.
In its most recent report released Jan 24, The National Association of Realtors anticipates "solid" gains in the US commercial real estate sector.

David Lereah, NAR's chief economist said "Even with a lot of new construction around the country, we are seeing healthy levels of commercial real estate space being purchased, rented and occupied.
Commercial real estate is distinctly different from residential real estate. The terminology is very different and here is a list of new terms from O to Z.
 
Article Directory Home > Real Estate > Commercial Real Estate
 

Can't find what you're looking for? Try Google Search!
 
 
Copyright © 2005 - by FinanceNook.com™ All Rights Reserved Worldwide.
All Trademarks and Servicemarks are the property of the respective owners.
Synergy Singapore