California property owners can pay up to 42.1% in taxes on the sale of their investment property because of capital gain and depreciation recapture. With a 1031 Exchange, you can defer, reduce, and even eliminate paying taxes.
A 1031 Exchange allows real estate investors to defer capital gains tax on recently sold investment property by reinvesting the proceeds into like-kind property of equal or greater value. The transaction gets its name from Section 1031 of the U.S. Internal Revenue Code.
If you own investment property and would like to discuss your tax-deferred 1031 Exchange options, contact us at 415-691-6525.
For over 26 years, Real Estate Transition Solutions has advised California investment property owners with 1031 Exchanges, Delaware Statutory Trusts, complex real estate investments, securitized real estate, and tax planning strategies. Our team of licensed 1031 Exchange advisors in San Francisco will help you select and acquire suitable 1031 Exchange properties that meet both your financial and lifestyle objectives.
Internal Revenue Code section 1031, which establishes the transaction structure referred to as a 1031 Exchange, is one of the most advantageous sections of the US tax code. A 1031 Exchange allows for the deferral of taxes when investment property is sold in conjunction with the purchase of another replacement property. The tax savings alone is reason enough to justify a 1031 Exchange — but there are secondary benefits that can often be even more valuable.
As a wealth-building tool, a 1031 Exchange gives investors access to a property’s appreciation to increase buying power without a tax penalty. Armed with more buying power, investors can purchase quality assets, expand their portfolio, diversify into new property types, and even adopt a new ownership strategy.
Unexpected events and economic changes impact real estate investors every year, but 2020 stands out like no other. The global pandemic abruptly and dramatically disrupted multifamily housing, office, retail, and hospitality sectors of the industry. Inevitably, savvy investors shifted focus and strategy as long-term tenant trends and investment opportunities started to emerge.
Location and asset class are always key factors in any real estate transaction, and they will play an even bigger role in 2022. Before selecting replacement property consider these 10 trends impacting your 1031 replacement property selectionin the new year.
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