A lot of investors dont know but they can defer some capital gain taxes and obtain cash for the remaining amount while selling property in a 1031 exchange.
An investor pays taxes on the debt obligations related to replacement property or the cash proceeds received. In both of these events, the investors receive a boot. A boot means a property that an investor receives during the exchange and is not considered like-kind. Receipt of cash is referred as cash boot.
The exchanger can receive the cash proceeds after purchasing the identified property. It can also be purchased after the exchange period finishes in case there are some properties that were identified but not bought. If the exchanger asks the closing officer for disbursing a fixed dollar amount related to proceeds, then also cash proceeds can be received by the exchanger.
It is advised to avoid doing an exchange if the boot is more than the amount of capital gain.
If you are a real estate investor looking for investment property in Massachusetts, you can connect with FAI Exchange for the same. This company offers exchange properties for 1031 in the form of Delaware Statutory Trust (DST). You can also get an advice on a partial exchange through the experts.
Learn more about the DST investments and 1031 exchange by visiting this link. You can call the representatives of the company directly to clarify your doubts: (888) 669-3332
The company also answers the queries via email: WLM@SNETINVEST.COM.