1031 exchange provides the advantage of offering significant tax advantages to real estate buyers. Though overlooked, a 1031 exchange is considered to be one of the best-kept secrets in the Internal Revenue Code. Under Section 1031 of the Internal Revenue Code, owner of a real property can sell his property and then also reinvest the proceeds in ownership of a like-kind property and defer the capital gains taxes. To qualify as a like-kind exchange, exchanges must be made sure that they are done in accordance with the rules set forth in the tax code and in the treasury regulations.
The services are available online offered by many of the companies. One such could be the 1031 Exchange Services, LLC, which is based in North Carolina or the 1031 Exchange Options. A thorough web search can show up the best investment option.
1031 Exchange Services offers a complete line of qualified intermediary services that range from being a safe-harbor for the exchange of funds to complete reporting of the exchange to the IRS (Internal Revenue Service). They provide a range of services like tax-deferred exchange to meet your special needs or those of your client via simultaneous exchanges, delayed exchanges, construction (improvement) exchanges, reverse exchanges, multi-property exchanges, and multi-party exchanges.
Most preferred service is the reverse exchange option. The major reason is that it is capable of solving the issue of finding a way to take control of the replacement property prior to the sale of the old property in a 1031 exchange. The code sees to that it doesn't allow for an exchanger to exchange into a property already owned. Only reverse exchange is ready to close on a replacement property, while still trying to sell the old property. Other reasons named to setup a reverse exchange include securing the replacement to avoid the risk of possibly losing that property and ridding oneself of the replacement property dilemma and once that old property has been sold, there is a 45 day window to find a suitable replacement property.
Other notable services are mineral exchanges that can be done in exchange for a city lot, oil exchange, or oil drilling exchanges of equipment and a working or royalty interest for other real estate.
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