Benefits Of A 1031 Exchange (Tax Deferred Purchase) in Johnson County

Real Estate Agent with Overland Park Real Estate (No association with Inc)

The sale of a business or investment asset in a neighborhood with prices in upwards of $500,000 such as Overland Park, Leawood, Prairie Village, Mission Hills and many other neighborhoods in Johnson County.  Whether it is real estate or capital equipment, can create a large tax liability. A properly structured tax deferred exchange under Internal Revenue Code §1031, however, allows businesses and individuals to defer the recognition of the capital gains or other taxes associated with the sale of most business or investment assets, as long as new assets are purchased to replace the existing assets. In general, most tax deferred exchanges are structured either as a real property or a personal property exchange. Real property exchanges include only interests in real property, while personal property exchanges encompass virtually all other types of property.

To be eligible for the favorable tax treatment afforded by an exchange, the property or business asset to be disposed of must have been held by the client for productive use in a trade or business, or for investment purposes, and be exchanged for like-kind replacement property that will be held by the client for similar purposes. With few restrictions, whether an exchange involves a parcel of real property, an airplane, a broadcast spectrum, or a fleet of cars, exchanges allow businesses and individuals the flexibility to sell property to whomever they wish, and to buy new property from whomever they wish. There is no requirement that property be "swapped" to be eligible for an exchange nor do exchange transactions require any significant changes to the terms of the sale and purchase agreements. By utilizing an exchange clients are able to maximize their capital by deferring the taxes that would otherwise be incurred on an outright sale of their property and use the entire amount of the equity from the exchange to acquire substantially more replacement property. Properly structured and administered, an exchange becomes an invaluable tax saving tool and an integral element of the business cycle. For a more detailed explanation of the various elements and regulatory requirements of tax deferred exchanges, please refer to a complementary copy of the IPX1031 Brief Exchange booklet that is available from myself or my office if you are interested.

I'm going to work on getting a copy in a PDF format for easy viewing on your home or office computer.

If you would like more information on this please just give me a call or send me an e-mail

Jordan M. Mackey
Cell Phone: 913-707-7314

Comments (4)

Chris Lengquist
Ad Astra Realty - Olathe, KS
Kansas City Real Estate Investing

Hello Jordan,

Welcome to KC Rainers.  Keep up the good work.  1031s are a great tool.  Sometimes inappropriate, but a great tool most of the time!

Apr 25, 2007 07:36 AM
Jordan M. Mackey
Overland Park Real Estate (No association with Inc) - Overland Park, KS
Overland Park Real Estate ::
Thanks for the comment Chris, after chatting with you I know you're definitly the 1031 Exchange Guru so I'll be sure to refer any questions to you from now on ;-)
May 10, 2007 03:21 AM
Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert

Using the 1031 exchange to set yourself apart from your competition is a wise move.  There are very few realtors that actually try to distinquish themselves from the rest by working with 1031 exchanges.  KUDOS!

Dec 07, 2007 10:16 AM
Ken Tharp
Iowa Equity Exchange - West Des Moines, IA
Section 1031 Exchanges, Iowa/U.S.

I agree with William. I give quite a few presentations to agents at real estate sales meetings, and there are oftentimes lots of people who have no familiarity with 1031 exchanges at all. You don't have to know everything; you just need to recognize when an exchange might be appropriate so it can be investigated.

Ken Tharp, Iowa Equity Exchange 

Dec 09, 2007 07:51 AM