Sunday, May 29, 2005
1031 Like Kind Exchanges
Investment Strategies
The 1031 Like Kind Exchange is a valuable transaction for the real estate investor. It involves property held for productive use in a trade or business or for investment (except inventory and stocks and bonds) for property of the same type. For the most part, unless "boot" is involved (see other articles) the exchange is nontaxable in the current year. Soagain, generally, if you exchange business or investment property solely for business or investment property of a like kind, no gain or loss is recognized under section 1031 of the IRS Code.
Over the years, if you continue to "trade up" this strategy can be advantageous as investors not only accumulate property, but property that appreciates and is more valuable. Like Kind Exchanges, often referred to as Starker Exchanges, Deferred Exchanges, Land Swaps and Trades, have particular rules that govern whether a real esate transaction actually qualifies for the 1031 advantage. It is IMPORTANT that your/your professional tean and your REALTOR are familiar with these rules!
For those of you looking for wise investments in real estate, the Asheville area, the hottest market for second/vacation homes in the USA, could top your list!
And, with just a little planning, the 1031 Exchange (or 1031 Like Kind Exchange) can speed you on your way. The 1031 Exchange as it applies to the real property transaction means that you may NOT reside in /at the property. (There is a two week exception.) However, with appreciation rates in the Greater Asheville area at about 10%++ annually, the 1031 transaction is still an excellent plan. As your investment property increases in value and, in a couple years, you exchange it for another (again with no tax liability) you can see your investment grow.
Look to the future with LAND LEGACIES. Stewardship of mountainland in the Greater Asheville area assures a future for your family where streams and nature are bountiful. Remember: Land is a limited commodity.
Wise Choice: Since regulations concerning 1031 Exchanges give specific examples of what is or is NOT like-kind, it is wise to seek the counsel of your attorney, CPA, and/or a Qualified Intermediary while you and I are out locating the replacement properties.
The 1031 Like Kind Exchange is a valuable transaction for the real estate investor. It involves property held for productive use in a trade or business or for investment (except inventory and stocks and bonds) for property of the same type. For the most part, unless "boot" is involved (see other articles) the exchange is nontaxable in the current year. Soagain, generally, if you exchange business or investment property solely for business or investment property of a like kind, no gain or loss is recognized under section 1031 of the IRS Code.
Over the years, if you continue to "trade up" this strategy can be advantageous as investors not only accumulate property, but property that appreciates and is more valuable. Like Kind Exchanges, often referred to as Starker Exchanges, Deferred Exchanges, Land Swaps and Trades, have particular rules that govern whether a real esate transaction actually qualifies for the 1031 advantage. It is IMPORTANT that your/your professional tean and your REALTOR are familiar with these rules!
For those of you looking for wise investments in real estate, the Asheville area, the hottest market for second/vacation homes in the USA, could top your list!
And, with just a little planning, the 1031 Exchange (or 1031 Like Kind Exchange) can speed you on your way. The 1031 Exchange as it applies to the real property transaction means that you may NOT reside in /at the property. (There is a two week exception.) However, with appreciation rates in the Greater Asheville area at about 10%++ annually, the 1031 transaction is still an excellent plan. As your investment property increases in value and, in a couple years, you exchange it for another (again with no tax liability) you can see your investment grow.
Look to the future with LAND LEGACIES. Stewardship of mountainland in the Greater Asheville area assures a future for your family where streams and nature are bountiful. Remember: Land is a limited commodity.
Wise Choice: Since regulations concerning 1031 Exchanges give specific examples of what is or is NOT like-kind, it is wise to seek the counsel of your attorney, CPA, and/or a Qualified Intermediary while you and I are out locating the replacement properties.
