1031 Exchange Basics
Are you interested in investing in real estate that is currently performing better than your current investments? Would you like to find a way to defer paying the capital gains taxes that you are normally required to pay on the sale of real estate you already own? If so, then you can benefit from a doing a 1031 exchange. Investors that have completed a 1031 property transfer are able to have positive cash flow, as well as an excellent rate of return on their investment.
The Purpose of a 1031 Exchange
Savvy investors purchase real estate investment properties through a 1031 property exchange because the IRS allows taxpayers to replace one property with one or more better-performing properties, without having to pay any capital gains taxes at the time of transfer. There are specific rules and timelines that apply to this opportunity.
1031 Exchange Property Transfer Rules
The IRS allows a 1031 property investor to transfer one real estate investment property for another, without any tax implications, if a new property is identified (the replacement property) within 45 days (identification period) of selling the existing property (relinquished property). In addition, the closing on the replacement property must take place within 180 days (exchange period) following the sale of the relinquished property.
The IRS code necessitates the involvement of a third party (intermediary) in the 1031 exchange property transaction. The qualified intermediary plays a crucial role in a 1031 property transaction, as the proceeds from relinquished property that are being sheltered from capital gains tax cannot come into the physical possession of the real estate investor. This neutral third party will hold the funds and disburse them at time of closing for the replacement 1031 property.
Finding the Right 1031 Property Quickly
Investors searching for 1031 replacement property must act quickly to stay in compliance with the 1031 exchange rules. Many investors make the mistake of focusing solely on commercial property as the 1031 exchange property to purchase. The problem with commercial real estate is that it usually requires extensive and time-consuming due diligence. It is also often difficult to finance and may require extensive and costly rehabilitation.
Acquiring single family residences as suitable replacement 1031 property can be accomplished quickly and with much less due diligence. In the current market environment, the cash-on-cash returns and potential for long term appreciation are among the best they have ever been in recent years, making single family residences an ideal choice for 1031 property.
Meridian Pacific Properties, Inc & 1031 Property Exchanges
Meridian Pacific Properties, Inc. is a leader in quickly providing performing single family residential property for 1031 property exchanges. These turnkey properties feature instant positive cash flow. There are a number of benefits that clients experience with the expert help of Meridian Pacific Properties:
If you are interested in learning more about 1031 exchange property, or would like to purchase a 1031 property, contact Meridian Pacific Properties today. Do not let your identification and exchange periods pass you by -- take advantage of the vast amount of the tax benefits real estate investors are able to experience with a 1031 property exchange.
The Purpose of a 1031 Exchange
Savvy investors purchase real estate investment properties through a 1031 property exchange because the IRS allows taxpayers to replace one property with one or more better-performing properties, without having to pay any capital gains taxes at the time of transfer. There are specific rules and timelines that apply to this opportunity.
1031 Exchange Property Transfer Rules
The IRS allows a 1031 property investor to transfer one real estate investment property for another, without any tax implications, if a new property is identified (the replacement property) within 45 days (identification period) of selling the existing property (relinquished property). In addition, the closing on the replacement property must take place within 180 days (exchange period) following the sale of the relinquished property.
The IRS code necessitates the involvement of a third party (intermediary) in the 1031 exchange property transaction. The qualified intermediary plays a crucial role in a 1031 property transaction, as the proceeds from relinquished property that are being sheltered from capital gains tax cannot come into the physical possession of the real estate investor. This neutral third party will hold the funds and disburse them at time of closing for the replacement 1031 property.
Finding the Right 1031 Property Quickly
Investors searching for 1031 replacement property must act quickly to stay in compliance with the 1031 exchange rules. Many investors make the mistake of focusing solely on commercial property as the 1031 exchange property to purchase. The problem with commercial real estate is that it usually requires extensive and time-consuming due diligence. It is also often difficult to finance and may require extensive and costly rehabilitation.
Acquiring single family residences as suitable replacement 1031 property can be accomplished quickly and with much less due diligence. In the current market environment, the cash-on-cash returns and potential for long term appreciation are among the best they have ever been in recent years, making single family residences an ideal choice for 1031 property.
Meridian Pacific Properties, Inc & 1031 Property Exchanges
Meridian Pacific Properties, Inc. is a leader in quickly providing performing single family residential property for 1031 property exchanges. These turnkey properties feature instant positive cash flow. There are a number of benefits that clients experience with the expert help of Meridian Pacific Properties:
- Investors do not need to worry about having to search for a 1031 property; Meridian has already performed all of the pertinent research and due diligence.
- Each 1031 exchange property Meridian sells is renovated to today's standards, have quality tenants that pay their own utilities, and are managed by professional property management companies.
- Each 1031 property Meridian sells is backed by their Investor Assurance ProgramTM, which includes a 1-year home owner's warranty as well as a 1-year rent warranty on the tenants that have been placed in the property.
- Meridian is dedicated to making the 1031 exchange property process straightforward so that investors are given the opportunity to purchase quality real estate that will supply them with the IRR they need. Meridian's goal is to provide a minimum IRR of 18% per annum over a 5 year period on 1031 property net of expenses.
If you are interested in learning more about 1031 exchange property, or would like to purchase a 1031 property, contact Meridian Pacific Properties today. Do not let your identification and exchange periods pass you by -- take advantage of the vast amount of the tax benefits real estate investors are able to experience with a 1031 property exchange.
