Those who own investment properties and are thinking of trading up to a new property for higher dividends can benefit greatly from making use of the 1031 Tax Exchange. Also known as the Starker Exchange, this particular section of the Internal Revenue Code allows investors the opportunity to defer capital gains tax. However, there are several areas of requirements that need to be met in order for this procedure to be of any profitable use. The first of which being that the properties being bought and sold must be of “like-kind”. While this may sound simple enough, in a industry heavy with seemingly convoluted jargon it is best to consult with legal professionals who specialize in this area.
Successfully Navigating Through the Intricacies of 1031 Tax Exchange
Legal experts who are familiar with section 1031 transactions are a godsend to investors, as it allows them the ability to take advantage of the process with significantly less stress and confusion. Law firms like Franks & Roeder routinely assist their clients along through the intricacies of a 1031 Exchange. Helping to not only ensure that the properties being exchanged meet the Like Kind requirements, but also ensuring proper submission of documents within the appropriate time parameters. Which if course means that incurring additional fees while failing to meet requirements is less likely.
How a Starker Exchange Can Benefit Investors Over the Long Term
What’s more, a 1031 Exchange is beneficial to those interested in the profitability of the long game. This is because investors can ride that tax deferment ‘til the wheels fall off, so to speak. Meaning of course that any heirs who inherit property through a 1031 exchange receive it at a fair market value, and all accumulated deferment taxes are wiped clean. If you are interested in learning more about real estate planning or performing a Starker Exchange in Davenport, IA contact the legal experts at Franks & Roeder today.
