Law Offices of
Ken Koenen
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What is a "1031 Exchange"? If you own real estate as an investment, either raw land or rental property, you are accumulating appreciation every day. In other words, if you bought some rental property for $200,000 in 1996, it is very likely to be worth more than $400,000 today! If you were to sell that property, you would be required to pay a capital gains tax on the $200,000 increase, plus any depreciation that you have taken over the years. This could amount to thousands of dollars. A Gift from the IRS! The IRS, through IRS Code §1031, allows you to sell your property, and invest the proceeds in a "like-kind" property, and defer the payment of the capital gains tax to a later time. This is a HUGE advantage for investors. Special Rules! There are very specific and time sensitive rules that must be followed. You may not obtain personal access to any of the proceeds from the property you are selling. You must identify a new property no later than 45 days after you sell the original property. Finally, you must close escrow on the replacement property no more than 180 days after you close escrow on the original property. For more information, call my office! |
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Send mail to ken@lawken.comLaw Office of Ken Koenen
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