TAX DEFERRED EXCHANGE
Elevated
A Team of Real Estate Investment Specialists Built Exclusively for 1031 Exchanges
Why Agent Exchange?
Agent Exchange is dedicated to assisting investors successfully complete 1031 Exchanges and increase their monthly investment income. Our expert knowledge of up-and-coming markets, as well as our deep understanding of the rules and regulations of the 1031 Exchange, allows us to consistently place our clients in beneficial fiscal futures.
We offer expert consultation designed to give you the knowledge and tools necessary to make an informed decision regarding your real estate investment properties.
What Is a 1031 Exchange?
A 1031 Exchange allows a property owner to defer the capital gains tax on the sale of real property as long as the proceeds are used for the purchase of a replacement property. By allowing an investor to use 100% of the untaxed proceeds from a property sale to buy new property, a 1031 Exchange is both an efficient and effective method to preserve capital, readjust a portfolio, and invest in properties with greater income capabilities.
What are the Benefits of a 1031 Exchange?
1031 Exchanges allow investors to exchange their real estate investments without having to pay capital gains taxes on the sale of that property. By using a 1031 Exchange wisely, investors can essentially use the full, tax-free capital from the sale of their original property towards the purchase of an equal or greater valued property. By deferring the capital gains taxes through a 1031 Exchange, investors can draw from a larger pool of funds to put towards their next real estate investment.
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When Should You Enter Into a 1031 Exchange?
1031 Exchanges are a powerful tool for investors looking to branch out and expand into different markets. But they can also be helpful for those who have made bad investments and who are at risk of losing money with the sale of their property due to capital gains taxes. 1031 Exchanges allow investors to defer capital gains taxes and place their funds into more promising real estate investments with a higher ROI.
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How Does a 1031 Exchange Work?
- An investor must decide it is most beneficial to their financial future to sell the property and defer capital gains taxes by entering into a 1031 Exchange.
- The owner must sell the property. To qualify for a 1031, an investor cannot take constructive receipt of the proceeds—it must be held by a Qualified Intermediary until a new property is purchased.
- Identify the replacement property within 45 days. The most common 1031 Exchanges give the investor 180 days to close on a replacement property or multiple properties to complete the exchange. To qualify for the tax deferment, investors must reinvest the entirety of the proceeds from the initial sale and acquire real property with the same or greater amount of debt (leverage).
Reverse Exchange Information
Agent Exchange also specializes in reverse exchanges. Although not as common as a forward exchange, a reverse exchange is still a beneficial financial tool for investors looking to maximize their financial opportunities. A reverse exchange is a property exchange wherein the replacement property is acquired before the seller’s relinquished property is sold. A reverse exchange is helpful in that it may allow the seller to hold current property or properties until market value increases, allowing them to sell for a maximized profit. Generally, there is a holding period that applies to properties in reverse exchanges, averaging around 180 days.
