Real Estate Investors - Don't Just Sell, Use A 1031 Exchange_12154

[19591h94]

As an investor, you are aware that each and every single dollar that you have invested is compounding your wealth, and, conversely, that each and every dollar not working for you can be considered a lost chance to further compound your profits.  When it comes time to make a sale on a piece of property, you have two choices. The 1st option that you have at your disposal is  to make a outright sale and recognize the profits as a capital gain.  This means that you'll have to pay capital gains taxes on the  proceeds. Whenever you pay money to the United States government in the form of taxes, you are throwing away potential profits.   
Your second and more profitable option is to conduct a 1031 tax exchange. An exchange is a great way to keep more of your investment funds making you money.  A 1031 exchange has a non-recognition provision; this means that you are not to pay the capital gains taxes immediately; as a matter of fact, you can defer the taxes indefinitely,You are not allowed to view links. Register or Login, while your money is compounded by the extra income produced by investing your tax deferment.
To demonstrate, imagine that you are the owner of several small investment properties, like duplexes or triplexes, whose values have increased during the time you have owned them.  At this juncture,You are not allowed to view links. Register or Login, your first instinct might be to sell these properties up front and reap the benefits of your investments.  A wise investor, however, might choose to conduct a 1031 exchange and put the money gained from  these smaller properties towards buying  another piece of  property, which will, itself proceed to increase in worth over time, meanwhile continuing to increase your wealth.  Best of all, the extra money available to you from your tax deferral will work to heighten your ability to leverage for greater loans, building  your future profits.
1031 exchanges aren't just for land and buildings, either.  It is possible to conduct a 1031 exchange on any  real estate you are holding for investment in your business or trade, in addition to certain types of personal property, from a backhoe or crane to airplanes or classic cars. In fact, 1031 exchanges are particularly advantageous to those who have money in collectibles or antiques such as classic cars, because of the greater capital gains tax liability on the sale of these types of items.  It is important to note, however, that you cannot exchange  shares of stock, bonds,You are not allowed to view links. Register or Login, or interest gained from  a Real Estate Investment Trust.
So, next time you are planning to sell a piece of real estate or other  investment, pause for a moment to consider the future dividends you could reap if you were to make an exchange.  If you choose to make a 1031 tax exchange rather than selling your property outright, you can build your wealth over time and come out ahead in the end.
Real Estate Investors - Don't Just Sell,You are not allowed to view links. Register or Login, Use A 1031  Exchange