 |
 |
| 1031 Realty Advisors, Inc. |
1031 SOLUTIONS FOR BUYERS & SELLERS
|
Find Replacement Properties:
• 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 |
|
|
|
 |
|
|
|
 |
| "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. |
|
 |
|
