Understanding 1031 Exchanges
Let’s dive in and look at the 1031 Exchange. First let’s explore what a 1031 Exchange can do for you Is 1031 exchange something you can take advantage of? Here is a breakdown, you can decide for yourself. Let’s take a look.
What is an exchange? 1031 exchange is a section of the IRC. Within the time guidelines among others, a properly structured 1031 Exchange lets investors defer capital gains when reinvesting in a second property after the sale of another.
Let’s wrap our heads around the power of 1031 Exchanges.
The Essential Laws of Calculators Explained
Only $65,000 would be left after capital gains of 100 thousand dollars assuming about 35 K in combined taxes.
The Essential Laws of Calculators Explained
Assuming industry average of twenty five percent down with loan to value ratios of seventy five percent, would limit the buying potential of property B to only $260,000.
Assuming similar ratios, a 1031 Exchange would allow the investor the entire $100,000 to reinvest, resulting in buying potential of $400,000 for property B.
Protection from capital gains is the hallmark of 1031 Exchanges. Make sure you or your financial consultant understands all the terminology in 1031 … Read more