Are you thinking about selling your investment property and looking to buy another one? A great option for you may be a 1031 tax deferred exchange. A 1031 Exchange may allow you to avoid paying capital gains taxes from that sale and reinvest the proceeds in property or multiple properties of like-kind and equal or greater value. This must be done within a certain time frame. If you’re looking to sell your investment property, contact our experts and we’ll handle the escrow with incomparable professionalism.
1031 Tax Deferred Exchanges can be a complex process. One aspect of this is like-kind. Like-kind property is property of the same nature or character, though they may differ in grade or quality. Improved or unimproved real properties are generally like-kind. An apartment building is typically like-kind to another apartment building. However, if the apartment building is outside the US, that would not be considered like-kind. Generally, with a like-kind exchange, you are not required to recognize a gain or loss under the IRS Code Section 1031. This exchange only applies to real property, not personal or intangible property. In January 2018, the IRS limited exchanges of machinery, equipment, vehicles, artwork, collectibles, patents, and other intellectual property and intangible business assets. These, in general, do not qualify for non-recognition of gain or loss as like-kind exchanges. With these 1031 Tax Deferred Exchanges, as the rules can be complex and changing, so it’s best to have experts at every step of the way. Golden State Escrow handles these types of exchanges with ease and professionalism.