Essential Factors that You Need to Realize About 1031 Exchange in Property Investment

Let’s face it; taxes can be a considerable burden sometimes; however, it is entirely unavoidable. The good thing is that through some ingenious ways, the government allows people to utilize their cash to make even more before they ask for their cut. When you are interested in investing in real estate, you ideally buy low and sell high. So, what takes place when you purchase property and sell it later for profit? In this case, you are going to incur massive capital gains tax on the proceeds that you make. That is where 1031 exchange works its magic. You can click this link for more details: turner1031.com.

According to section 1031 of the IRS code, one is allowed to defer taxes on the cash gained from the sale of investment property by utilizing those gains to invest in another property. One of the requirements that you ought to fulfill is that you are supposed to choose a replacement property of equal or greater value to the original one. The moment that you sell some property, the cash is held by an intermediary (Qualified Intermediary) that acts as the third party to the transaction. They are supposed to hold the money until you get the next property to buy. You need to be very fast when going for your next property. Such a transaction ought to happen within 45 days of selling the original property, and you must also buy the replacement property within 180 days of the sale. Although it sounds a bit complicated, it is a very cool deal if you are looking for some tax gains. You can find a replacement property here!

Investment in real estate is a creative way of making more money, and there is no better time of investing than now. Remember that you can enter this endeavor only if you are sure you have the financial might as well as the right people to consult. Get proper advice from your accountant, qualified mortgage broker, as well as a financial advisor. If you are patient enough and invest wisely, you will benefit from the 1031 exchange of the IRS code. If you are unsure about how to go about this, some firms specialize in such endeavors and can give you whatever boost you desire. It would be advisable to seek assistance before embarking on this investment drive. You might think that you qualify only to end up paying a lot of taxes because of misinformation. Click this link for more details: https://en.wikipedia.org/wiki/Property.