Are you ready to stop being a landlord?
There are many reasons why you might be holding onto your investment property…
Are you worried about paying the capital gains taxes that result from the sale? Or could it be that you don’t want to sell and manage yet another piece of real estate, or perhaps you think that by keeping the rent(s) low it will save you from having to deal with tenant and maintenance headaches?
We’ve all been there…be honest, maybe you’ve already psychologically tuned in to a common default – deciding to leave the property to your kids because a) you don’t know what to do with it, or b) you simply don’t want to pay the taxes now.
Look, the fact is many property owners typically never figure out how much they will pay in taxes before selling, and may not realize the liability looming over their heads! But, if it’s the tax issue that is keeping you awake at night, you should know that there are options out there. What if I told you that there is an option to trade the equity in your current investment property into something that will potentially give you a greater return – without the landlord/tenant headaches?
Can this really be true? Yes, you do have options, and there may be options you have not considered… including solutions that may help you completely and legally avoid capital gains taxes. A 1031 Exchange is one option you might consider.
Check this out…A 1031 Tax-Deferred Exchange allows you to preserve the value of your property investment and can be a powerful tool if administered correctly. A tax-deferred exchange under Section 1031 of the Internal Revenue Code allows the real estate investor to sell an investment property and acquire another “like-kind” property while deferring federal capital gains taxes until later. This lets you reinvest sale proceeds that would otherwise be paid to the government as capital gains taxes
1031 Exchanges can be relatively simple trade-ins or two-party swaps to more complex non-simultaneous 1031 exchanges involving separate buyer and sellers.
Non-simultaneous exchanges require the use of an independent third party – known as a Qualified Intermediary. The QI holds the sale proceeds for the benefit of the taxpayer during the exchange, disbursing funds for purchase of like-kind replacement property, and returning any unused funds to the taxpayer at the end of the exchange. Section 1031 exchanges must be completed within 180 days. Taxpayers recognize gain and pay tax on any unused funds or when they ultimately “cash out” of their property.
Could a 1031 Exchange really be the answer to your ‘taxing’ headache and landlord nightmares?
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*There are material risks associated with the ownership of real estate properties, including but not limited to, tenant vacancies, loss of entire principal amount invested, and that distributions, potential cash flows, returns, and appreciation are not guaranteed. All information provided is for educational purposes only. The material contained herein does not constitute an offer to sell and is not an offer to buy real estate properties or securities. This material does not constitute tax or legal advice. All investors should speak with their own tax and legal advisors before considering any real estate investments. Past performance and diversification are not a guarantee of future results. Securities products offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Diversified Investment Strategies is independent of CIS. bd-ld-a-235-9-2015