RE/MAX Lakeside sells Lake Arrowhead Real Estate

RE/MAX Lakeside – 1031 Exchange and what you need to know….

Internal Revenue Code 1031 is a powerful tool for deferring capital gains tax on commercial/investment transactions. This section allows taxpayers to exchange real or personal property for new “Like-Kind” property, while deferring recognition of any capital gains.

Section 1031 creates the ability for you to defer capital gains on commercial/investment transactions by placing your sale proceeds with a “Qualified Intermediary” for up to 180 days until the closing of the purchae of the replacement property.

The most commonly used tax-deferral strategy is the Forward Delayed Exchange. In a typical Delayed Exchange, the taxpayer sells a business or investment property and acquires replacement property of equal or greater value within 180 days. The use of the Exchange Service is required to facilitate a valid tax-deferred exchange.

Before you begin the exchange process, be sure to consult your accountant or financial advisor to insure that a 1031 exchange is right for you.

Step One: Sale of the relinquished Property

Step Two: Identification of the Replacement Property. The Exchanger must identify the property to be purchased within 45 days following the sale of the Relinquished Property.

Step Three: Purchase of the Replacement Property. The Exchanger must obtain the Replacement Property within 180 days following the sale of the Relinquished Property.

FOR MORE INFORMATION GO TO: WWW.IRE.GOV