Ten thirty-one exchange corp.

Ten thirty-one exchange corp.Ten thirty-one exchange corp.Ten thirty-one exchange corp.

Ten thirty-one exchange corp.

Ten thirty-one exchange corp.Ten thirty-one exchange corp.Ten thirty-one exchange corp.
  • Home
  • Contact Us
  • 1031 Basics
    • Types of 1031 Exchanges
    • Important Deadlines
    • Rules & Qualifications
    • Benefits & Considerations
  • Fees
  • Why a 1031?
  • More
    • Home
    • Contact Us
    • 1031 Basics
      • Types of 1031 Exchanges
      • Important Deadlines
      • Rules & Qualifications
      • Benefits & Considerations
    • Fees
    • Why a 1031?

  • Home
  • Contact Us
  • 1031 Basics
    • Types of 1031 Exchanges
    • Important Deadlines
    • Rules & Qualifications
    • Benefits & Considerations
  • Fees
  • Why a 1031?

Benefits and Considerations of 1031 Exchanges

Benefits

 

  • The taxpayer can dispose of property and acquire new property without immediate capital gains liability. In effect, this is an "interest-free loan" from the government that can be increased through subsequent exchanges.
  • Under current law, the deferred tax liability is forgiven upon the death of the taxpayer- the taxpayer's estate never has to repay the "loan."
  • Business considerations should play the dominant role in the decision to make an exchange. For example, the need or desire to:
    • Consolidate or diversity investments
    • Obtain greater appreciation for the real property
    • Increase cash flow
    • Relocate a business investment
    • Eliminate management problems

Disadvantages and Other Considerations

 

  • Reduced basis in the Replacement Property, resulting from the carry-over of the basis of the Relinquished Property
  • Lower depreciation deductions
  • Possible additional escrow, attorney, accounting, intermediary and accommodation titleholder's fees.
  • Net proceeds from the disposition of the property cannot be used for anything except reinvestment in real property (without tax consequences).

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