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Great service
"We could not be more pleased with the service that we had."
Dan and Viola
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The 1031 Advantage
What you know can help you.
Positioned on the front lines of the industry, you hold a clear advantage when it comes to investing in real estate. Understanding and using tools such as Section 1031 of the tax code, you not only can create effective investment strategies for yourself, and I can serve as trusted advisor.
Why Pay Taxes if You Don't Have To?
The 1031 serves as an effective way to defer paying taxes that would have otherwise been due on the sale of a residential real estate property. Keeping it simple, the investor who buys a property for $200,000, for example, and sells it in six years for $250,000 would typically have to pay a capital gains tax on the $50,000 gain. If he or she invests in another "like-kind" propert of equal or lesser value, however, then those taxes are deferred until the property is sold outright. As long as the money continues to be invested in real estate, the capital gains taxes are deferred.
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1031s in a Nutshell
Section 1031 tax-free exchanges apply to any property held for investment purposes, or for productive use in a trade or business, and is often referred to as a “tax-free” exchange. Instead of a straight buy/sell/buy, investors can “exchange” one property for another – essentially bypassing or postponing paying taxes on the profit. Instead, that capital can be used to trade up in investments.
In general, an investor can use Section 1031 provisions to defer most investment taxes if they use a Qualified Intermediary and identify up to three “like-kind” investment properties within 45 days of the close of escrow of the sold property and complete the new purchase(s) within 180 days of closing.
In addition, the values of the replacement property must be equal to or greater than the value (the purchase price adjusted for actual closing costs) of the sold property. For example, a $150,000 property whose sale requires closing costs of $8000 would be valued at $142,000.
I know the ins and outs of how these transactions work and would be happy to help in your investment.
It Just Makes Sense
For you, investing in single-family homes or multi-unit residential properties makes sense, based on their experience in pricing, access to available properties, network of contractors and service providers, contract familiarity, and related finance and negotiating skills.
“As a REALTOR, my negotiating skills and insider information about the market, and it’s why 1031 Exchanges can really work in your favor."
Competitive advantages
I recommend connecting with one or more qualified intermediaries. Visit www.1031.org for starters. “Network with a company that handles these types of transactions, collect their brochures and information, and keep it handy.”
In sum, being able to help clients through the 1031 process is yet another way I can boost their value. “When I’m representing buyers, I can talk to them about the advantages of using a 1031 versus a straight purchase." “Many times, you don’t even know about this option, and it allows you to transfer equity without having to pay any capitol gains tax.” This is still another way "U'll Love Lucy!"
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Lucy Brunner
CRS, SRES & MatureMoves Specialist
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CENTURY 21 Preferred
2800 4th SW; Suite 3
Mason City, IA 50401
Business: (641) 424-9400
Cell: (641) 425-9285
Toll free: 1-877-2GET-C21
Fax: (641) 423-1902
E-Mail: Lucy.Brunner@Century21.com
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