1031 Tax Exchange

Call Louis or Renae Jennings at 407-592-2315

1031 Tax Exchange Properties - Please don't make a mistake that could cost you 56% of your capitol gain.  If you do not fully comply with the 1031 rules and regulations, you will not qualify for the tax deferment on your capitol gain and you will be taxed on it.  You need to find a 1031 tax exchange service.  These exchange service companies typically charge a very nominal fee,  and they will assign you to one of their qualified professionals who is usually referred to as the "qualified intermediary" (QI) or "qualified facilitator (QF).  They are different names for the same title.  Your Title closing agent or Escrow agent can recommend a 1031 exchange service company.  You do want one that has been established and that has references because they will be holding your money from your closing.   

1031 tax exchange properties include land, office, warehouse retail, multi residential, hotel, and residential properties that have been declared an investment property.  CSI Commercial Real Estate specializes in retail net lease investments of 1031 exchange properties.  We have been buying, selling and leasing retail commercial real estate since 1984.   

Capital  Gain  T a x  Information

Under normal circumstances, when you sell a property you have to pay taxes on the gain. Gain is caused by taking depreciation deductions for tax purposes or by the property appreciating in value during its ownership.

A Section 1031  tax  deferred  exchange, named for the Internal Revenue Code Section it refers to (also known as a Starker-Exchange, Tax  Free  Exchange, or Like  Kind  exchange), allows an exception to the real estate capital gains-taxes.  When you sell your business or investment real estate, replace it with a different business or investment property, and complete a 1031  exchange, you can defer payment of the capital gains taxes normally required on these sales. You can also avoid capital gains taxes on rental property capital gains taxes.

If your plans include using the money from the sale of a business or investment property to buy more of the same, a 1031  real estate  exchange provides greater proceeds for your next investment-more than you could gain through the re-investment of after taxed proceeds.

A 1031  tax  exchange and the Capital  Gain  tax rule is not a  tax  loophole. It is a section of the Internal Revenue Code, written by Congress, to allow anyone who meets all the requirements to sell their property and defer paying taxes on the gain.

Understanding the Capital  Gains  Tax  Rule and
Avoiding the Capital  Gains  Tax

All relinquished (old) and replacement (new) property must be vacant land, rental property or property used for trade, business or investment. The property must be held for at least 2 years a day to qualify for a 1031  Exchange. If the properties meet these requirements, you may  exchange  any real estate for any other type of real estate.  If, when you buy it you declare it an investment property, then when you sell it you can replace it with another investment property. 

Qualified Intermediary:

You cannot have actual or constructive control of any of the proceeds received from the sale of the old property. By law, all money is held by a Qualified Intermediary (also referred to as a QI, Accommodator or Facilitator). You cannot have an associate or employee, attorney, broker or CPA hold the proceeds, nor can you leave the proceeds in escrow until the second property is purchased.  

You have 45 days from the date of closing on the old property to identify a list of properties, from which you will purchase the new property.  If you do not identify a replacement property within the 45 day timeframe, you will have to pay capitol gains taxes.  From the date of closing, you have 180 days to close on one or more of the properties from your 45-day list.  The titleholder on the old property must be the same titleholder on the new property.

You must reinvest all cash proceeds from the sale, and if your sold property had debt then your new property must have debt service that is equal or greater than the debt on the sold property.  You can purchase one of more replacement properties and you must declare that you are using one of the following three rules: Three Property Rule, or the "200% Rule" or the "95% rule".

If you would like information on how net leased investment work then please visit the following link to our World Wide Web site: http://www.renaejennings.com/Navagation/nnn-info.htm

NOT TO BE CONSTRUED AS TAX OR LEGAL ADVICE. IF TAX OR LEGAL ADVICE IS NEEDED, AN ATTORNEY, ACCOUNTANT OR OTHER QUALIFIED COUNSEL SHOULD BE CONSULTED.

For fast, professional results, pick up that 1,000 pound phone and call
Louis or Renae Jennings at 407-592-2315

email:  investments@cfl.rr.com  

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