Powerful Tool to Defer Capital Gains Tax
Section 1031 of the Internal Revenue Code provides an effective strategy for deferring the capital gains tax that may arise from your business/investment property sale. By exchanging the property for like-kind real estate, property owners may defer their tax and use all of the proceeds for the purchase of replacement property. Like-kind real estate includes business/investment property, but not the property owner’s primary residence. Section 1031 does not apply to the exchange of stocks or bonds. (Click the button to register to view, download and analyze Section 1031 Exchange replacement property investments from our online partner.)
Additional Reasons to Participate
in a 1031 Exchange
- Relieve the burden of active real estate ownership
- Obtain ownership in shopping centers, multifamily residential and/or triple-net property in good locations
- Diversify your real estate portfolio by geography and property type
- Invest in single asset and/or multiple asset offerings
- Choose from highly leveraged, moderately leveraged, or no leverage offerings
- Facilitate estate planning
- Choose from many sectors, including retail, office, industrial and multifamily
CASH INVESTMENT OPTION
Our program make it possible for every accredited investor, even those without a property to exchange, to participate in the ownership of commercial real estate. Investors may make a cash investment in any interests offered by our sponsors.Contact Us to Learn More
1031 EXCHANGE INVESTMENT OPTION
In accordance with the Internal Revenue Service's Revenue Ruling 2004-86, and subject to specified conditions, investors may purchase a beneficial interest in the Delaware Statutory Trust which hold the replacement property.Contact Us to Learn More
REASONS TO PARTICIPATE
The reasons to participate in a 1031 exchange are numerous. There are specific timelines and procedures that must be followed to take advantage of the benefits of this program. Please contact us to see if the strategy is right for you.Contact Us to Learn More
There are three basic steps in any 1031 exchange:
- Exchanger sells property and proceeds are escrowed with a Qualified Intermediary (ask for a referral)
- Qualified Intermediary (or Q.I.) transfers funds for purchase of replacement property
- Exchanger receives beneficial interest in the Delaware Statutory Trust.
Guidelines to Remember
- Seller should have the contract specify that the sale may be structured as a 1031 exchange.
- Seller cannot receive or control the net sale proceeds – the proceeds must be deposited in a qualified escrow.
- Replacement property must be like-kind to the relinquished property.
- The replacement property must be identified within 45 days from the sale of the original property.
- The replacement property must be acquired within 180 days from the sale of the original property.
- In a reverse exchange the taxpayer acquires the replacement property prior to disposing of the relinquished property.
- Generally, the cash invested in the replacement property must be equal to or greater than the cash received from the sale of the relinquished property.
- The debt placed or assumed on the replacement property must be equal to or greater than the debt relieved with regard to the relinquished property.
*The Sherer Group, LLC. does not offer tax advice. This material is not intended to replace the advice of a qualified tax advisor. Investors should consult with their tax advisors before pursuing a 1031 exchange.