The IRS Code 1031 Tax Deferred Exchange (“exchange”) is often talked about in commercial real estate circles as an option for those property owners looking to sell an asset while also protecting themselves from exposure to federal and state capital gains taxes. Let's Face it, nobody likes to write checks to the government. This is generally and especially true for most hardworking business people who don’t always view the government as the best steward of the money entrusted to their care.
Well, it is important to recognize that we cannot avoid taxes altogether - they must be paid, eventually. However, with the guidance of your tax professional, the use of an exchange accommodator, and the proper help of a professional real estate advisor, the payment of these taxes can be deferred and the use of those funds can instead be leveraged for continued growth of the real estate portfolio. We will explain this strategy in brief below, but for further review and information, please contact me and my team as we can help put you in touch with the right people.
So what should we know about these 1031 Exchanges? Let’s see…
1. Dollars & Sense
2. Property Determinants
3. Timing Factors
Christopher J. Destino, SIOR, a Principal at Lee & Associates, is an engaging, responsive professional who enjoys working closely with his clients and helping them succeed.