OPTIONA 1031 is a tax deferred method of purchasing an investment property, selling it, and purchasing another property of equal or greater value and deferring the tax gain. It's a simple strategy for selling an investment property and acquiring anther property within a specific time frame. The logistics and process is similar to a normal sale/buy transaction. The advantage is the seller (investor) is allowed to defer the "capital gains" on a sale to a later date. When reading the word "exchange" which is attached to the 1031 a person would think that one would exchange a property for another property owned by a person who had the same desire. It would be difficult for an investor to find a person who owns a property that would be desirable to exchange for both parties (buyer and seller). To make it simple, the IRS allows an investor to sell the property to any buyer with all of the seller's proceeds (monies) being held in escrow by an authorized intermediary (title company) and allowing the investor (seller) to name one or more properties within 45 days of the closing of the property being deferred and 180 days to close on the new property.
For more information, visit: www.1031exchasngemadesimple.com
Thursday, June 18, 2009
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