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The Basics About Section 1031:

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Section 1031 of the Internal Revenue code provides that no loss or gain can be recognized on the exchange of property held for productive use in a trade or a business, or for an investment.  A 1031 exchange allows a property owner to trade one, or more, properties for one, or more, replacement properties of "like-kind" and defer the payment of federal income taxes and in some state taxes until the property is eventually sold outside of an exchange.

Property values in your market have appreciated significantly. You can maximize your investment return by taking advantage of one of the last significant tax advantages remaining for real estate investors.  The tax deferred exchange gives you the ability to dispose of a property without incurring a capital gain tax liability, thereby allowing the earning power of the deferred taxes to work for you, instead of the government.  Tax deferred exchanges provide investors with the opportunity to improve their investment position by either acquiring larger properties to depreciate or acquiring different types of investment real estate.  The options to diversify, both geographically and by the type of investment property, are virtually unlimited!

Basically to meet IRS's specification, the property must be identified within 45 days of the date of transfer of the property being relinquished in the exchange and the exchange must be completed within 180 days.  Transactions must be handled by a qualifying intermediary or QI and confirm to the strict IRS rules.  A QI is an independent party who facilitates the tax-deferred exchanges.  There are many companies that provide this service.  Below, find the IRS Manual, QI and IRS information links to explore.

 

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Realtor Greg Zeh from our Exclusive Buyer Agency Team can assist you with your next 1031 exchange purchase in and around the Adirondacks.  Please check out some of the below links.  Call upon Greg today to get started.  Click on Greg's picture to start!