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Simply put, a 1031 exchange is also known as tax deferred exchange and is a simple way forselling a property, that is qualified and then furthering it with an acquisition of another property within the same time.
Making 1031 Exchange Work For You in Property Selling Simply put, a 1031 exchange is also known as tax deferred exchange and is a simple way for selling a property, that is qualified and then furthering it with an acquisition of another property within the same time. The legal processes and logistics of selling a property and then purchasing yet another one are identical acts to any legalized sale and buying situation. A “1031 exchange” is unique as the overall transaction is taken to be an exchange and not merely a sale. It the difference between this “exchange” and not the mere purchasing or selling which enables the individual taxpayer to qualify for a deferred gain treatment. Hence, simply put, sales under the IRS are taxable and 1031 is not. Owing to the fact that exchanging a property presents an IRS identified method to the deferral of the capital gain taxes, it is extremely essential for taxpayers to understand the elements that are present and the real intent underlying this kind of a tax deferred transaction. According to the Section 1032 of the Internal Revenue Code that one can locate an apt tax code requires for successful exchange. It is also interesting to note that it is within the Like-Kind Exchange Regulations, enacted by the US Department of the Treasury, that we locate certain interpretations of the IRS and the normally accepted standards of rules, practice and compliance for enacting a complete qualifying transaction. It is also important to take note that the Regulations are merely not legal implications, but a reflection of the interpretation of the Section 1032 by the IRS. Importance of 1031 Any able real estate property investor/owner must take into consideration an exchange when he/she is anticipating to possess a substitute of a “like kind” property subsequent to the sale of his/her present investment property. Anything other than this would call in for the payment of a capital gain tax, that wou7ld be 15 percent more and can go up to even by 20 percent. When you are planning selling properties, it is beneficial to join hands with an expert service provider specializing in business tax return solutions and seek professional guidance. These companies provide 1031 exchange programs that further partner with other eminent companies like Global Value Add, Inc to accommodate Internal Revenue Code Section 1031 tax deferred exchanged for taxpayers that have been subject to US federal capital gains in India. Read More About: individual tax returns, foreign bank account taxes, fbar reporting, tax planning services, 1031 irs
"Making 1031 Exchange Work For You in Property Selling"