Deferring capital gains taxes is no longer a problem. If you have heard about the 1031 tax exchange, you probably know how easy it is to defer capital gains taxes. With the introduction of 1031 tax exchange the rise in real estate businesses and property dealing businesses is prominent. With a 1031 tax exchange, you can easily sell your old property and buy a new one without paying capital gains taxes. However, there are certain criteria that you have to fulfill.
The 1031 tax exchange greatly helps realtors and business property investors. As these businessmen do not have to pay taxes, they are easily able to sell their old property and invest in a new one. This helps them stack up their profit in the coming years.
The 1031 tax exchange is a very easy process but involves the need for a Qualified Intermediary (QI). Once you meet the required criteria, you can proceed with selling your old property and the money you earn is kept with the QI you hire. This QI is then directed by you to purchase a new property.
There are certain things that you should keep in mind while dealing in a 1031 tax deferred exchange:
- The price of the new property that you buy should be equal or higher than that of your old property that you sell.
- After the exchange, you have 45 calendar days to identify a new property and you can identify up to 3 properties.
- You also are given a total of 180 calendar days to close in on your identified property.
With Fai Exchange, the entire process of 1031 tax exchange becomes a whole lot easier. We become your Qualified Intermediary and also help you in arranging the necessary documents for the exchange to happen.