Monday, May 31, 2004
BENEFITS OF THE 1031 LIKE-KIND EXCHANGE
Possibly the most important benefit of investigating the 1031 Like-Kind Exchange transaction and putting it to work for you is your ability to defer potentially taxable gain you may realize from a sale of the property.
This way you may be able to use all of your equity to acquire another property, instead of the amount of equity left over after paying applicable Federal and State income taxes on your gain.
Another benefit: The ability to go from one type of property to another
allows you to use... leverage, diversification, cash flow, consolidation, management relief, and possibly increased depreciation.
It is possible, under the current IRC Section 1031 rules, to continue to
exchange properties, using all of your equity, thus increasing your portfolio
Net Worth much faster than were you to sell properties, pay the taxes, and
then acquire another property with the remaining equity
This way you may be able to use all of your equity to acquire another property, instead of the amount of equity left over after paying applicable Federal and State income taxes on your gain.
Another benefit: The ability to go from one type of property to another
allows you to use... leverage, diversification, cash flow, consolidation, management relief, and possibly increased depreciation.
It is possible, under the current IRC Section 1031 rules, to continue to
exchange properties, using all of your equity, thus increasing your portfolio
Net Worth much faster than were you to sell properties, pay the taxes, and
then acquire another property with the remaining equity
