If you are in need of assistance with executing a successful tax-free exchange of property we can offer our experience to make for a seamless process. A tax-free, or more accurately, a tax-deferred exchange is a method of selling like kind real estate according to certain procedures and rules put in place that allow for all or most of the capital gains taxes to be deferred. It is helpful to imagine that the taxpayer is not selling a capital asset but is reorganizing his/her investments. Congress decided that this method of reorganization is not a taxable event if conducted in accordance with certain rules.
Tax-deferred exchanges require more than a real estate professional. However, our role is to make you aware of the IRS rules, show you how they can be applied to a particular sale, and handle the real estate end of the transaction. We also coordinate with other involved parties for the successful completion of the exchange. The following is a list of examples of why you would want to exchange;
1. You would like to switch to a faster-appreciating investment.
2. Federal and state capital gain taxes can exceed 22 percent on the capital gain.
3. You sell fully depreciated property and buy a more valuable property creating a new tax shelter.
4. You want to leverage up your investments.
5. You want to rearrange your holdings in anticipation of death.
6. You want your investment property to be near your principal residence.
7. You want to sell your current property for reasons such as the age of the neighborhood or maintenance expenses, etc.
Investors are becoming more and more aware of the many benefits that arise from the tax-deferred exchange. Please do not hesitate to contact us for assistance with yours!