There are tremendous tax benefits to a 1031 Exchange when selling investment Real Estate, and the attorneys at the Davidson Law Group can help to guide you through the process. So, don’t stress, let the Davidson Law Group take care of you.
If you are selling investment Real Estate and are looking for a way to defer paying taxes on that property, contact the Davidson Law Group today to find out how we can assist with saving money now with a 1031 Exchange.
When selling a business or investment Real Estate property, there is typically a requirement for the seller to pay capital gains tax on the earnings from the sale. 1031 Exchanges can keep you from having to pay capital gains taxes immediately, and in some cases, keep you from having to pay capital gains taxes at any point. The way a 1031 Exchange works is if you buy a property that is similar or “like-kind” to your current property, you can postpone paying your taxes and sometimes avoid them altogether. You are required to use the proceeds of your sale to invest in a new property so that your sale is viewed as a reinvestment with no justifiable taxation. Your financial investment hasn’t changed in any significant way; the only thing that has changed is the literal property.
If you eventually sell your replacement property, you’ll have to pay your taxes at that point, but if you never end up selling your property, and you have done the proper Estate Planning, then the beneficiaries of your property will not have to pay any capital gains taxes because of the taxation step-up in basis rule. 1031 Exchanges are incredible because with the proper guidance from an attorney at the Davidson Law Group, you can help your family earn money on business or investment property and never have to pay capital gains taxes on those earnings.
When setting up a 1031 Exchange, there are a few time limits that are essential to keep in mind. After selling the original property, you have 45 days to indicate your replacement property. After that, you have 180 days to close on the new property. Keep in mind that the 180 days starts as soon as you sell the original property, so taking 45 days to indicate the new property leaves you with only 135 days to close. These time limits are strictly enforced and there are no extensions. An attorney at the Davidson Law Group can help guide you through all of these deadlines and legal limitations.
If you’re hoping to defer your taxes on your sale and you don’t need the earnings from the sale immediately, then a 1031 Exchange is a perfect option for you. You can essentially use the money saved from capital gains taxes to reinvest into property that is even more valuable, and this process can occur until your passing when, if done properly, can transfer to your beneficiaries without anyone ever having to pay capital gains taxes. At the Davidson Law Group, we work closely with companies who serve as a Qualified Intermediary for taxpayers while facilitating a 1031 Exchange so that we can fully represent you as your legal counsel.
At the Davidson Law Group, we believe that you should be able to sell your property when you are ready to do so without the government taxing your earnings, so we are standing by to help you leverage the equity in your property and accomplish this task. If you are unsure about whether or not you qualify for a 1031 Exchange, contact the Davidson Law Group in Fort Worth, Allen, or Tyler. We can not only help you find out if you are qualified, we can help guide you through the exchange process.
