This article will focus upon explaining the benefits of the 1031 tax exchange and why you should consider this if you hold property and want to sell in the near future.
To start off this article, there’ll be a bit of background given on a 1031 tax exchange. This used to be very vague until a publication was put out by the IRS back in 1991. A1031 tax exchange is used primarily for exchanging one property for another. This does not have to be done directly but rather can be done indirectly by using the services of a company licensed as a qualified intermediary. The requirements of being a qualified intermediary is not a subject which you need to know a great deal about a rather make sure that you use one of these companies when looking to do a 1031 tax exchange.
The benefit of using a 1031 tax exchange is that you are allowed to swap properties without having to pay capital gains on the property which you have sold. This allows you to build up your real estate wealth without having to worry about paying capital gains.
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