1031 Exchange Jonesboro GA

A 1031 exchange allows people to exchange one property for another of like kind so they can avoid paying capital gains taxes. Find out how this property exchange works and if you qualify or it is something you want to consider.

Local Companies

All Stucco & Mold Inspections Inc.
770 590-7880
181 Peachtree Street
Atlanta, GA
REL Properties, Inc.
404-373-9411
755 Commerce Dr
Decatur, GA
Direct Link Realty, Inc.
(404) 214-6060
1421 Peachtree ST NE #510
Atlanta, GA
Lexington Appraisals
1-866-542-1539
P.O.Box 15328
Atlanta, GA
First Service Realty
(770) 210-5151
2531 Fair Oaks Dr
Jonesboro, GA
Mylan Realty Group
(770) 472-3323
548 Highway 138 W
Jonesboro, GA
Coldwell Banker Bullard Realty Co
(770) 477-6400
238 Stockbridge Rd
Jonesboro, GA
R West Properties
(770) 477-9798
8455 Highway 85
Jonesboro, GA
Roper Realty & Tax Services
(770) 477-1073
974 Pointe South Pkwy
Jonesboro, GA
Solid Source Realty
(404) 574-5240
530 Parkwood Way
Jonesboro, GA

What types of Property Qualify?

A 1031 Exchange allows sellers of some real and personal property the opportunity to avoid paying capital gains taxes (which are 15% plus state taxes) by “exchanging” their sold property for newly purchased property. However, certain restrictions apply. The most important restriction is that only business property and investment property applies. So, an exchange under a purely residential home does not qualify, whereas exchanging a property that your business has used for its office, or even one used simply for investment diversification does.

But simply selling your office isn’t enough to qualify you for a 1031 exchange. Rather, the code also requires that that you simultaneously buy a property of “like-kind.” This does not mean that if you are selling a 2000 sq. ft. office you must buy a 2000 sq. ft office. Rather, the term is interpreted very loosely to mean virtually any real estate held for productive use in a business or for investment, whether improved or unimproved can be exchanged for any other property to be used for productive business or investment purposes. So, if you sell and unimproved lot of land and purchase an improved one or visa versa, this still qualifies, just as selling industrial property and buying rental resort property does. The point here is that while “like-kind” is an important restriction, it has been interpreted so broadly as to give individuals a lot of free reign.

The Exchange

When most owners envision a 1031 exchange they envision a provision whereby they must buy and sell the two properties on the same week or even the same day. But that is not the case. A tax-deferred 1031 exchange allows up to 180 calendar days between the sale of the first property and the purchase of the second. But no matter the time between sale and purchase, a 1031 exchange is required by the Internal Revenue code to have a “qualified intermediary” to manage the exchange.

A Qualified Intermediary

The requirement of a qualified intermediary is intended primarily to prevent individuals engaged in the exchange from using the time in between the sale and purchase of property to their financial gain. Although the seller has up to 45 days to set up the intermediary, the exchange is designed so that the seller should not profit from the use of the money before the purchase of the new property is made. An intermediary serves the judicial purpose of ensuring this. But it is important to remember that the qualified intermediary charges fee for this. While these services can vary in cost depending on the additional advisory services provided by the Intermediary, individuals interested in a 1031 exchange should expect to pay somewhere in the vicinity of $500 to $700 for the first exchange and $200 to $400 for each additional property.

About the Author:

Dan Johnson enjoys writing about 1031 exchange. Visit http://www.1031exchangelowdown.com/ to learn more.


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Featured Local Company

All Stucco & Mold Inspections Inc.

770 590-7880
181 Peachtree Street
Atlanta, GA
http://www.allstucco.com

Related Local Event
2Nd Annual Real Estate Industry Day
Dates: 9/18/2009 - 9/18/2009
Location: Holiday Inn Decatur
Decatur, GA
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