1031 Exchange Pros

Merits Of 1031 Exchanges 

1031 exchanges also known as tax deferred exchanges. This is whereby investors can defer capital gains tax and other associated expenses too. One of the major benefit of these kind of exchanges is the fact that it allows for growth and you can increase your rate of investment for your property. In these kind of exchanges, there is no aspect of a loss or a profit made and this is due to the fact that it involves the exchange of productive property between two people. The major requirement for a 1031 exchange is that it must be between commercial properties only. An exchange of a commercial property with a private property cannot be qualified as a 1031 exchange. In this kind of exchange, you need to find a person who has what you want and he wants what you have, this is known as double coincidence which is very difficult to find and hence 1031 exchanges are likely to take a lot of time before they are finalized. To ensure the information that you have read about 1031 Gateway is very important, follow the link.
In such a situation where there is such delays, you can do a delayed exchange. It's allowed in the 1031 exchange act but it should not be more than 6months. That is the time period that is allowed to close a 1031 exchange. 1031 exchanges are not for personal uses, this exchange was developed to assist with business issues an also to help them find alternative ways to invest too. In a 1031 exchange, cash is not recognized and therefore if you receive cash, then you will be taxed according to the normal tax rates that are prevailing. There are some benefits that you will get to enjoy from these 1031 exchanges for example you can be able to dispose off property that is giving you headaches in terms of for example maintenance by exchanging it for another that is better. This is advantageous to you in that you will save on costs and you can save some cash for yourself.  Get attached to us now and learn some lesson about the 1031 exchange click here.

Another advantage is that you are able to transfer the property together with the costs that will come about with it. For example if it's an equipment, then you can shift even the depreciation to the other party. When doing 1031 exchanges of homes and other real estate property, then you should consider things such as the mortgage and any outstanding debts that might be present. You should not swap a property that will make you even more in debt. Learn more about 1031 exchange http://www.huffingtonpost.com/phil-jemmett/pros-and-cons-of-a-1031-t_b_4415703.html.