Wednesday, May 11, 2005

Why is a 1031 Tax-Deferred Exchange so popular?

Normally when you sell property, you must recognize gain or loss in that transaction. If it is a gain, it is subject to tax. Section 1031 of the Internal Revenue Code, however, provides an exception to that rule. A 1031 exchange allows the deferment of capital gains tax which would have been owed on the sale of the property. Tax deferment is leverage and leverage creates wealth! You must take specific steps to qualify for a 1031, including using a qualified Intermediary or "Accomodator". It's not as hard as it sounds and the benefit is great! You should check with a qualified accountant to find out more information. If you would like a 2005 informational booklet explaining more about this, however, you can call me or email me and I will be happy to mail you one.

Janis Calkins, Agent
California Oaks
(805) 218-7016


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