With Tenant-in-Common (TIC) properties, you own an undivided share and deed. You can receive monthly income and all tax shelters for your pro-rata percentage share.

Although you are comfortable with real estate investing, and have had good returns in the past, you do not like the daily headaches that can be associated with real estate management.

You are ready to give up the hassles of dealing with tenants, maintaining facilities, paying bills, etc. You would like to sell your property, but are faced with enormous tax consequences on the sale.

A Section 1031 exchange is one of the few techniques available to postpone or potentially eliminate taxes due on the sale of qualifying properties.

By deferring the tax, you have more money available to invest in another property. In effect, you receive an interest free loan from the federal government, in the amount you would have paid in taxes.  Any gain from depreciation recapture is postponed. You can acquire and dispose of properties to reallocate your investment portfolio without paying tax on any gain.

There are many ways to benefit from a §1031 exchange. Below are just a few of the advantages to this powerful investment strategy:

Tax Savings: Federal and State taxes combined can be as high as 28% of the gain on an investment property.

Leverage: Every dollar you save in taxes allows you to increase your investment portfolio through acquisition of real estate worth many times your initial purchase.

Income: Increase your cash flow by exchanging out of bare lands and into an income-producing property.

Consolidation: Exchange from several management-intensive properties into a larger property with on/off-site management.

Estate Planning: Continue to avoid recognizing gain until death, at which time the gain may escape income taxation because of the stepped-up basis that the taxpayer's heirs may obtain in the property.

Example of the benefits of Exchanging vs. Selling:

This example demonstrates an additional $112,000 of purchasing power!

To review your specific needs and learn how you can benefit from a 1031 tax deferred exchange, call one of our Exchange Consultants at 949-235-1995 for a free consultation.

Benefits: (cont.)

Leverage
With the funds saved by deferring capital gains and other taxes on the sale of one property, investors have increased funds available for the purchase of a larger property.

Diversification
Investors can expand the number or types of property in their portfolio, perhaps purchasing properties in multiple markets or states.

Consolidation
Investors can sell smaller properties and purchase one larger property to maximize ownership benefits and reduce management responsibilities.

Cash Flow
Investors can sell a property that is producing little or no income (such as land) and purchase property or properties with greater cash flow performance (such as a retail shopping center).

Management Relief
Investors who no longer want to manage high-maintenance properties can reinvest in properties requiring little or no management.

Increase Depreciation
Investors can exchange from a non-depreciable property (such as raw land) to a property that can be depreciated.

Estate Planning
Investors may continue to replace properties through consecutive 1031 exchanges, preserving profits until and estate can be passed down tax free (if under the tax cap).

Something else to consider...
A Section 1031 exchange is one of the few techniques available to postpone or possibly eliminate taxes due on the sale of qualifying properties.

By deferring the tax, you have more money available to invest in another property. In effect, you receive an interest free loan from the federal government for the amount you would have paid in taxes.

Even gains from depreciation recapture are postponed.

You can acquire and dispose of properties to reallocate your investment portfolio without paying tax on any gain.

As clarified by some recent Legislation and IRS Pronouncements, it is possible to sell appreciated investment or business real estate and buy a residence which can be later converted to personal use without incurring any income tax. 

Tax can be permanently avoided if the replacement property is held until the owner dies.  The beneficiaries inherit the property at a "stepped up" basis equal to the value at the date of death and never have to pay income tax on the profit from the prior sale.


Contact us for more information at 877-520-8773, or email us.