Nashville Real Estate Investors, Do You Know About the...

Real Estate Agent with The Lipman Group | Sotheby's International Realty #311723

1031 Exchange?!!?!?!!?


If you have investment property in Davidson County, or in the Greater Nashville Area, and you are getting ready to sell and invest in something else, then you MUST know about this 1031 Exchange! 

The 1031 Exchange is basically a way to defer taxes and reinvest your savings! 

Through the 1031 Exchange, you can further leverage your equity, diversify your real estate portfolio, consolidate the equity from many properties into one, keep you from having to manage too many properties at once, work on your estate planning, or change property types to get the most out of the available depreciation!

Here is how it works:  Let's say you have three rental properties...

You have been managing them for five years and want to move up to something else. 

 So you put your properties on the market as a package deal...and sell them for $750,000.  Normally your capital gains tax would be $112,500, leaving you with $637,500 in equity to reinvest...

 Through the 1031 Exchange, you don't have to pay the capital gains tax, so you have $750,000 to reinvest!

Pretty cool, huh? 

 There are certain guidelines you must follow:

1.  At the closing of the investment properties that you sell, you MUST let ALL of the proceeds be held by a Qualified Intermediary.

2.  You have 45 days from the Sale date to pick out potential Replacement Properties.

3.  You must PURCHASE the Replacement Property within 180 days of the Investment Property Closing.


This system of tax deferral also has some other perks to it.  You don't have to purchase the same kind of investment property that you had previously purchased.  So, if you owned a duplex, you can take the proceeds of that sale and maybe buy a piece of land, or an office building, or a motel or even an apartment building! 





So what are you waiting for?  Stretch those DOLLARS and make them work for you! 


For more information about the 1031 Exchange, please contact Emily Lowe at 615.509.1753.





Comments (1)

Ray Carman
Gene Carman Real Estate and Auction - Hendersonville, TN

Great Post! Very informative for investors!



Apr 15, 2008 03:28 PM

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