Investment Property Exchange Services Inc offers 1031 Exchange Service

Investment Property Exchange Services Inc facilitate 1031 exchange or the transfer of one piece of investment or income property exchanging it for another piece of property that will also be used to generate income or providing investment.

The reason it's called 1031 exchange is that when certain criteria defined by the IRS Code Section 1031, capital gains taxes realized from either the sale or disposal of the property are deferred. This type of transaction does not differ too much from an ordinary sale or purchase of property only that certain documentation has to be presented showing that the transfer is indeed an exchange of property and not the sale of property. While sales are always taxable, exchanges are not. However, each particular exchange needs to meet specific requirements and may not be suitable for every type of property transaction.

Who should perform a 1031 exchange?

Exchanges are typical when an investor wants to retain 100 percent of their equity in a particular property that they wish to acquire by exchanging another piece of property to obtain that one. Typically, the sale of a piece of property could result in the combined payment of 30 percent of the sale price for federal, state and local taxes. This would leave the seller with only 70 percent equity from which to purchase more investment property. There are number of different categories concerning types of 1031 exchanges that are possible to be made. Here is a list of them:

Simultaneous - these are changes in which a relinquished property in a replacement property are closed and recorded on the same day.

Delayed - This is where the relinquished property is sold and replacement property is acquired after a 180-day delay. There are certain rules and regulations applying to this type of exchange that must be adhered to in order for it to be legal.

Improvement and construction -In some certain circumstances, property improvements can be made as required by the exchange documentation. This is typically conducted in order to bring the value of the replacement property in line with the property being relinquished.

Reverse - this type of a change takes place when an investor finds a replacement property he wishes to acquire before disposal of the piece of property he intends to relinquish. This investor cannot buy the replacement property and then exchange it for one he already owns, so he must find a surrogate to buy the replacement property.

Business and personal property - Section 1031 allows for the transfer and exchange of property other than real estate. However, certain considerations have to be taken when applying classes of same-kind property in order to make sure that the exchange remains on the same value level.

Partnership - Section 1031 allows for the exchange of property held by a partnership if all individuals with an interest in said property elect to have it considered personal property and thus qualify for an exchange. The individual partnership interest in a property can be an exchange for a similar valued piece of property either in whole or as part of an interest held by a partnership.

Select Investment Property Exchange Services Inc as your qualified intermediary assisting with your next 1031 exchange.

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