1031 Exchange Sales
The sale or disposition of business assets, including real estate, normally subjects sellers to tax liabilities. The sale of a large or valuable asset like a hotel or business property could expose an investor to a tax burden that would decrease his or her ability to engage in future investment. To alleviate this problem and encourage re-investment, Section 1031 of the Internal Revenue Code provides for a tax-deferred option. That option consists of a properly structured exchange of investment real estate. In a 1031 exchange, the investor does not normally "swap" property with another investor. Instead, the investor sells one asset, and, within a certain time period, purchases replacement assets of like kind. In these cases, Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment." Due to this favorable tax treatment, investors considering the sale of investment property should carefully consider whether re-investment in like-kind assets is a viable option for them. TM 1031 Exchange assists real estate investors in finding suitable like-kind replacement properties for re-investment. We maintain a nationwide database containing information on eight different types of commercial real estate. If you want to sell or buy commercial real estate, please call 1-877-4TM-1031 to learn how we can help you. You may also send us an email here team@tm1031exchange.com.
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