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1031 Realty Advisors, Inc.

1031 SOLUTIONS FOR BUYERS & SELLERS

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• Tenant in Common Properties (TICs)
• Fee Simple, Whole & NNN Leased Properties
• Nest Egg – Guaranteed Master Leased Properties
• "Free" Investor Replacement Plans

Sell Properties:

• Network of 450,000 Investors, CPAs & Realtors Looking to Buy
• Affordable Success & Lead Generation Marketing Programs
• How to Quickly Sell a Property by Making It 1031 Ready

QUALIFIED BROKER REFERRAL PROGRAM

Tax Benefits of Exchanges

Whether the investor's property is owned free and clear or encumbered, the benefits of a tax deferred exchange are significant. The tax dollars saved by doing an exchange can be utilized to purchase additional investment property. Compare a sale versus an exchange.

Assume the following:

•	Investor sells property with no debt for $1,000,000
•	Basis is $500,000
•	The property has been held in excess of 12 months
•	Capital gain is $500,000 ($100,000 from recapture of depreciation deductions and $400,000 from appreciation in value)
•	Current federal tax rate for an individual is 15% on appreciation and 25% on depreciation recapture (corporations are taxed at a higher rate)
•	Investor's state tax rate is 9% (federal deduction for state taxes is not included)

	Exchange	Sale
Net Equity Capital Gain Tax Equity to Reinvest Acquisition Value (Assume 30% Down)	$1,000,000 $ None $1,000,000 $3,333,000	$1,000,000 $130,000 $870,000 $2,900,000

Result: The investor who exchanges is able to defer the capital gain tax and purchase replacement property worth $433,000 more than the investor who sells and reinvests with after-tax dollars.

Non-Tax Benefits of Exchanges

In addition to deferring the capital gain tax, tax deferred exchanges provide the investor with a wide range of nontax opportunities to suit the investor's portfolio:

•	Reposition assets
•	Change property types
•	Increase leverage
•	Increase depreciation deduction
•	Reduce management obligations
•	Provide for estate and retirement planning
•	Allow for relocation
•	Improve cash flow
•	Achieve property consolidation or diversification
•	Eliminate or create joint ownership
•	Defer phantom gain on problem properties
•	Construct improvements on a property

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"Like-Kind" Property

To qualify as "like-kind" property for a §1031 exchange the investor's relinquished and replacement properties must be property that has been and will be held for productive use in the investor's trade or business or for investment.