Kathy A. Torline-Nordstrom
ERA Herman Group Real Estate
Serving Colorado Springs
Are you a Colorado Springs Real Estate Investor?
Every real estate investor needs to have a exit plan — What happens when you want to sell your investment property?
- What if you have completely depreciated out your investment property?
- What if you have moved, and want to sell a property and purchase one in a different area?
- What if you want to sell your investment rental home and buy a fourplex?
- And the most important question, what if you want to sell and not pay the taxes when you sell?
A 1031 Tax Exchange may be the answer
What is a 1031 exchange?
- The easy way to explain it, it’s is a swap of one business or investment asset for another. You can sell one investment property and purchase another.
Why do a 1031 exchange?
- You can defer taxes on a investment property until you actually sell for cash many years later
Why is it called a 1031 tax exchange?
- It’s named after the section in the I.R.S. tax code, 1031
Where can I find out more info?
- Here’s the link the some info on the IRS web site. Also, talk to your tax accountant.
What types of properties do and don’t qualify for a tax exchange?
- Personal Homes, vacation homes that aren’t held as rentals don’t qualify
- Another investment property does qualify
Is there a timeline for the tax exchange?
- Yes, there are very specific rules and regulations, per the IRS guidelines, that must be met. These dates include the Identification Period, and the Exchange Period.
CONSULT A TAX EXPERT FOR ALL OF THE DETAILS AND TO SEE IF YOUR PERSONAL SITUATION IS A GOOD FIT FOR A 1031 TAX EXCHANGE.
It’s also very important that the Realtor you are using understands the 1031 tax exchange, and the timing involved in identifying and purchasing a property.