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Commercial and Investment real estate transactions have been moving at a brisk pace and a considerable percentage of those sales have been structured as 1031 Exchanges, allowing sellers to defer taxes otherwise due in the year of sale. Often the taxes deferred are used to repurpose or improve the replacement properties. This helps to create jobs and stimulate the post pandemic economy. 

Depending on your circumstances and goals, it may be a good time to re-assess, then reposition your portfolio utilizing a 1031 Tax Deferred Exchange. A 1031 Exchange permits an investor to defer the federal and state capital gains tax, gain due to depreciation, net investment tax and even some state-imposed non-resident withholding taxes. That can be upwards of 25-30% of your gain, equating to thousands of dollars instantly saved and used to reinvest in new investment property through the Tax Deferred Exchange. 

We asked our own Patricia Flowers, an industry veteran with over 20 years of experience who consults with hundreds of taxpayers each year ranging from owners of vacation cottages to CFOs of Fortune 500 companies, to explain this year’s surge of interest in 1031 Exchanges. Here are her top 5 reasons to exchange:

APPRECIATION
CASH FLOW
DEPRECIATION
DIVERSIFICATION
ESTATE PLANNING

With the current market moving as it is, an understanding of Section 1031 is essential to creating opportunities for investors looking for options to reposition assets, generate more cash flow and protect estates. Don’t “just pay the tax” because you think it’s the lowest it will ever be. Keep your equity and let it work for you. Read post in entirety here.

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The Biden Administration has proposed limiting Section 1031 Exchange deferral to a maximum of $500K as a “Pay For” to defray costs of the $1.8 trillion American Families Plan. You can help. Tell Congress to keep 1031 Exchanges unchanged.

 
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IPX1031 is the largest and one of the oldest Qualified Intermediaries in the United States. As a wholly owned subsidiary of Fidelity National Financial (NYSE:FNF), a Fortune 300 company, IPX1031 provides industry leading security for your exchange funds as well as considerable expertise and experience in facilitating all types of 1031 Exchanges. Taxpayers’ funds are held in segregated accounts at large stable banking institutions in the United States. Our nationwide staff, which includes industry experts, veteran attorneys and accountants, are available to help you and your legal and tax advisors. For additional information regarding IPX1031 and questions on 1031 Exchanges, please review:

Top Reasons to 1031 Exchange in 2021
1031 Information Exchangers Should Know When Filing Your 2020 Taxes
Opportunities of the 1031 Exchange
Capital Gains Estimator
IPX1031 Knowledge Center


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