How to Save Taxes in 2018 through 1031 Exchange
If you are a real estate investor your best move in Protected content save on taxes would be to take advantage of the Protected content . In case you don’t know what that is or how to use it continue reading this article.
What is a Protected content ?
Section Protected content the IRC refers to the exchange of like-kind properties allowing you to defer taxes on capital gains. Apart from the tax benefit that this maneuver provides, there other positives that a real estate investor could take out in a financial sense. For example, they could save money by exchanging a low-income (high maintenance) property for a high income one or move investment locations without having to pay taxes immediately.
What is a Like-Kind Property?
When it comes to real estate you can exchange almost any type of property for another as long as it is not a personal property and the most important requirement is that it needs to qualify as an investment property - a rental estate, commercial building, land, a restaurant and so on.
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How to do a Protected content ?
In addition to the above rules, there are more requirements to satisfy in order to be eligible to use the Protected content .
The net market value and equity of the property you buy must be the same or higher than the those of the property you sell.
You will have to pay capital gain tax on the difference between the values of the two properties if the new one is cheaper than the original one.
The transactions must be made by the same taxpayer.
The property owner must identify 3 like-kind properties they have interest in exchanging their own for within 45 calendar days from the closing of the original property.
The exchange must be completed within Protected content days (the new property must be bought and old one sold).
Why Do a Protected content in Protected content ?
According to industry specialists this is the best time for real estate investors to jump on the Protected content opportunity. This is because the property market has just reached a value even higher than the one it had a decade ago. The projections are for a price fall from next year onwards so Protected content really be the best time to exchange an old property that probably not bringing much profits for a better quality or better located one and dodge the capital gain taxes for a while. The additional benefits include:
Generate more monthly cash flow
Invest less time in managing the property
Enjoy more freedom
Are you a real estate investor looking for profitable strategies in Protected content ? Contact FAS CPA & Consultants today on Protected content to discuss your opportunities.
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