What is 1031 exchange? Well, if you have an investment property and you made a lot of money on it, and now you’re ready to sell, but you’re just concerned about that capital gain tax that you have to pay, you can do what is called a 1031 exchange. You can buy another property similar to that and defer the capital gain tax. For example, one of my clients bought in Carmel Valley 22 years ago, a house for $200,000, and she was able to sell the house in a profit, and she sold it for a million. So in order for her to avoid paying that capital gain tax, she could defer it by buying another property. So, she was able to identify another property. She only had 45 days to identify that house, but she was proactive, and she found it sooner, and she had 180 days to close on that house. If you have a similar situation, feel free to give me a call and I’ll guide you through it, because I do have a connection with the 1031 exchange accommodator, so I’ll make sure that this transition goes as smoothly as possible, and you’ll be very happy at the end.
- Exchanges refer to IRS Code Section 1031, which allows for the tax-deferred disposition and acquisition of investment real estate in which any tax may be deferred to a later date.
- Exchangors have 45 calendar days from the close of the sale of their property to identify the replacement property and then 180 days from the close of the sale to acquire replacement.
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Shirin Rezania Ramos | 858.345.0685 | www.shirinramos.com | Compass, DRE 0203379
