We use a 1031 exchange to roll over profits from an investment property into another like kind investment property without paying Capital Gains Taxes. This way you can retain the equity you have gained to move into higher value properties. The exchange can be for a single property or multiple properties.
Will I want to use the 1031 exchange for my personal residence?
No. It is not for your personal residence. You probably will not need it for your personal residence because up to $250, 000 for an individual or $500,000 for a couple who own the property jointly is tax free for personal residences.
The basics of a 1031 exchange!
Before you put the property under contract, you will need to find a qualified intermediary who can act as neutral party to take possession of the proceeds from the sale of your investment property. This intermediary will use the funds to purchase the property you are exchanging for. They will transfer the title for the new property to you after the purchase. There will obviously be a written agreement between you and the intermediary for all this to take place.
The wording in your sales contracts will be critical as they must state your intention to do an exchange.
Dates are important for a 1031 exchange. The IRS is not flexible on dates!
If you have not done so buy the time of the sale you will have to identify up to 3 possible replacement properties within 45 days of the sale. You will have to close on the replacement property within 180 days of the sale of the property you are exchanging.
Communication is very important during the sale and exchange so that everything is accomplished according to IRS rules.
Search Real Estate For Sale in Columbus
See TODAY's New Listings, search by beds/baths, square feet, listing status, days on market & more!
Want to purchase or sell a home in Columbus, GA? Call your Columbus real estate team, The Columbus Home Show Team at (706) 366-8000. Your neighborhood Columbus REALTORS® and agents are here to help with the Fort Benning housing market.