1031 Exchange: Everything You Should Know Before giving it a Try

Selling an investment property for a good profit is never a bad idea but it is equally important to find a better replacement option to keep the cycle going. Like all the other investors, you too might be looking for a more appealing property. That’s where 1031 Crowdfunding in Utah steps in. You can try 1031 exchange and enjoy attractive tax benefits.

A 1031 exchange allows you to swap ‘like-kind’ properties. Now, what does that mean? It simply means that you can choose a property with equal value and replace your property with it. The benefit is, you don’t have to pay taxes which you’re usually supposed to do while selling an investment property if the new property is ‘like-kind’.

What is a ‘like-kind’ property?

This is a broad umbrella that covers almost all types of investment properties. Both the properties should be of the same nature or character but you don’t have to necessarily replace a property with another same property. For instance, it is possible to sell a building and replace it with an office property, or even an undeveloped land.

As long as it falls under the investment property bracket, your chances are high. However, you cannot expect to sell an investment property and buy another one to live in. The reason is, personal properties do not come under 1031 exchange.

Tips for success

ü  Take time to find and choose the right 1031 exchange property. It is not a quick process and it is always wise to invest some time in finding a suitable investment property.

ü  Do through research to ensure that you are picking the best deal. Never rush in reaching a decision as it is a major one that is going to make an impact on your financial health.

ü  Keep yourself ready for surprises like a suitable property on day 1 itself.

1031 exchange is a brilliant concept. It allows you to choose from a variety of investment property options available. You can also go for a partial 1031 exchange depending on your requirements. Make sure to keep yourself informed with everything relevant and you’re good to go.

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