Here's A Brief Information Related To Like-Kind Exchange

Real estate investors may be required to pay capital gain taxes when a property is sold. Under current federal tax law, an IRC §1031 tax-deferred exchange permits the investor to defer the capital gain tax by investing in a “like‐kind” exchange, which is the disposal of an asset and the acquisition of another similar asset without rendering a capital gains tax liability from the sale of the first asset. Any real estate, except an individual's residence, is deemed like-kind to any other real estate. 


To enable a 1031 exchange, the investor needs a qualified intermediary (accommodator) to receive and hold the net sales cash proceeds from the sale. Check out Full‐Service 1031, LLC, if you are looking for services related to like-kind exchange in Idaho.


Some factors you should keep in mind with a like-kind exchange. And this is to ensure a tax liability is not created upon the sale of the first asset. Read on to learn about them:


  • Ensure the asset sold must be an investment property and cannot be a personal residence

  • Note that the asset purchased with the proceeds should be similar to the asset sold

  • Generally, the proceeds from the sale should be used to buy the other asset within 180 days of the sale of the first property. But also keep in mind that you must specify the property you will purchase in the like-kind exchange within 45 days of the sale.


Always hire a professional.


You must have a reliable 1031 exchange accommodator for professional 1031 exchange services, Look for a service with knowledgeable, trustworthy, and experienced professionals. The best company always recommends clients consult with their accountant or other tax professionals regarding what is best for their financial requirements and goals related to a 1031 exchange. After clients have decided that a 1031 exchange is in the best interest of meeting their financial goals, the best accommodator will help them achieve a successful 1031 exchange transaction.


Be sure to check out Full‐Service 1031, LLC, if you are looking for services related to like-kind exchange in Idaho.

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