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Take A Look At A 1031 Tax Free Exchange As A Commercial Pre-Foreclosure Strategy
Take A Look At A 1031 Tax Free Exchange As A Commercial Pre-Foreclosure StrategyI browsed through this information last night inside the new Realtor magazine regarding using a 1031 Tax-free exchange in a real estate foreclosure deal as a way to defer the capital gains taxes owed on the lost asset. I had not considered this but this may save your clients plenty of money.The method is not new, it was used commonly back in the early 1990's throughout the last commercial real estate meltdown. Today in a  much the same market scenario, lots of individuals are turning to this strategy just as before.When you find yourself attempting to decide if a zero-income property exchange suits your client, figure out how much capital gains the foreclosure will probably produce. The catch here is at least pertaining to tax purposes, no matter whether the value will be less than the financial debt. You could have a gain. If the property is financed and then foreclosed the debt is considered the actual sales price, plus the owners increase is actually equal to the excess on the financial debt above the tax basis. This is where it can be sticky,there are different guidelines with ... more

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