Oscar Ramirez Tucson Real Estate

Trades

REAL ESTATE TRADES

If you are selling Investment Real Estate Assets, you will want to explore the possibility of a Tax Deferred Exchange utilizing the IRC §1031 Tax Code of the Internal Revenue Service. This IRS code has been available to Investors since 1921 and allows a Seller to fully defer any Capital Gains taxes which may be due upon the sale of the Investment Real Estate Asset.


WHAT IS THE INTERNAL REVENUE CODE SECTION 1031?

Section 1031 relates to the disposition of property that is held for use in productive trade or business or held for investment. When performed correctly, the Tax Code provides an exception to the rule requiring recognition of gain upon the sale or exchange of property, allowing for the deferment of capital gain recognition and depreciation recapture.

A taxpayer can choose to have 100% of the capital gain and depreciation deferred or they can choose to have only part of the gain and recapture deferred.  In order to accomplish an exchange that is Fully Tax Deferred, the Taxpayer (Seller/Exchanger) must acquire replacement property that is of equal or greater value/equity/debt and spend all of the net proceeds from the relinquished property.


HOW DO I KNOW IF MY TRANSACTION IS A 1031 EXCHANGE?

Q: Is the property I am selling and the property I am purchasing intended for investment purposes?

A: If yes, then either the Seller or Buyer may want to consider an Exchange.

Q: Is the property the Seller's residence?

A: If yes, then the Seller will not be eligible for a 1031 Exchange.

An integral part of any exchange is to work with an experienced Broker as well as a Qualified Intermediary. Oscar Ramirez is one of a rare group of agents adept at real estate trades. Real estate trades are a creative solution to market conditions as well as a tax savings mechanism.

Qualified Intermediaries are appointed to carry out the exchange and prepare the necessary documentation for tax deferral, but they are precluded from counseling you on the desirability or tax implications of an exchange. Should you have more questions on 1031 Exchanges, I would highly recommend that you contact Brigitte Echave, CES® with over 20 years of Tax Deferred Exchange Experience as a Qualified Intermediary at Leverage Exchange Group, LLC in Tucson.  Brigitte can be reached at (520) 979-8256.


Facebook Icon
home