Capital Gains Tax Advice

The capital gains tax can be limiting for investors in all asset classes. You can see a substantial amount of the profits you make from the sale of a property be siphoned off by the IRS. This can set large investors back, but it can also hinder first-time or small and mid-range investors from seeing any real profits. It can also limit their ability to move up the investment ladder. While they might benefit from owning small multifamily properties, they can never accrue enough wealth to buy into a business or industrial property.

There are tax-deferral instruments that allow you to hold onto the gains from one sale and reinvest them fully into another property. 1031 and 1033 exchanges are the most common of these instruments. A 1033 exchange allows you to defer taxes from a property that has been seized due to eminent domain, is set to be condemned, or that has been destroyed by a force beyond your control. To avoid capital gains tax, you can reinvest the gain from the property within two years into another property that has a similar use or carries out a related service.

A 1031 exchange is not limited to properties that have been seized or otherwise rendered useless. However, to effectively coordinate a 1031 transfer, you generally have to use a qualified third party. You must also meet the time constraints developed by the IRS.

At TM 1031 Exchange, we can help brokers and investors find properties that suit their needs, thereby allowing them to defer the capital gains tax on an initial sale. Our service is easy to use and free to the investor. To learn more, call 1-877-4-TM1031 or email us at info@tm1031exchange.com.