All taxpayers can avail themselves of the tax-saving benefits of a like-kind exchange. However, many people don’t even know this section of the tax code exists. Here is a quick primer on forward 1031 exchanges and how you can benefits. If yoy have any questions, or would like to start your exchange, give our Fargo 1031 professionals a call today –877.373.1031.
A Primer on 1031 Exchanges
Like-kind (or 1031) exchanges allow taxpayers to defer their capital gains on the sale of real property – either real estate property. As set out in Section 1031 of the Internal Revenue Code, these exchanges are designed to encourage continued investment and economic growth. In order to complete a successful exchange, you need to take all of your net proceeds from the sale of your property and roll them into a new replacement property of equal or greater value. When done correctly, this allows you to avoid a substantial capital gains tax liability and continue building your wealth over time.
There are a number of requirements you have to follow in order to qualify for like-kind exchange treatment. First of all, you need to complete your exchange within 180 days after the sale of your old relinquished property. This is an inflexible date. During the first 45 days of that period you need to identify in writing your replacement property or properties. Those properties need to be like-kind to each other. Finally, you need to make sure that your replacement property is higher in value, equity, and debt when compared to your relinquished property. If you satisfy all of these benchmarks, you can defer your capital gains tax.
Start Your Fargo 1031 Exchange
Get started with your 1031 exchange today by contacting one of our Fargo qualified intermediaries. We have been facilitating like-kind exchanges in the Fargo area for decades and have the knowledge needed to ensure your exchange is successful. We can advise you on your options, answer all of your questions, and prepare the requisite documents for you so your closing goes off without a hitch. Give us a call today to discuss your options –877.373.1031.