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Section 1031 Exchange Explained

Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of rental property is held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a property investors trades one or more relinquished rental properties for one or more replacement rental properties of like-kind. Such an exchange allows the issuer to defer the payment of federal income taxes and some state taxes on the transaction.

The theory behind internal revenue code is to allow the property investors to reinvest the sale proceeds into another rental property, foregoing any economic gains that may have been realized from the sale. If you have recently sold, or are thinking of selling rental property, we can assist in matching you with a qualified section 1031 realtor. A section 1031 realtor can help you explore your section 1031 exchange options. Contact us today for a free consultation.

Benefits of a Section 1031 Exchange

Benefits to a section 1031 exchange include:

Section 1031 Exchange Benefits
  • Deferred capital gains taxes

    Section 1031 Exchange Benefits
  • The potential to yield more cash flow on an annual basis

    Section 1031 Exchange Benefits
  • More money to reinvest in a newer rental property due to zero capital gains taxes calculated on the old rental property

  • Consolidate your investment portfolio by electing a tenants in common exchange

    Section 1031 Exchange Benefits
  • Achieve your investment goals

    Section 1031 Properties

    In general, the tenants in common opportunities we offer are institutional grade rental properties. Such rental properties often have tenants subject to long term leases with major credit tenants.

    Rental Properties are in various locations throughout the U. S. and include office, retail, industrial and multi-family rental property types.

    The demand for high quality tenants in common rental property is so strong that the offering period is often quite short. If you have any questions regarding your particular needs and circumstances, contact us.

    Tenants In Common Triple Net

    A more popular alternative to sole triple net ownership is an investment in a single triple net commercial rental property by multiple property investors as individual property investors. This type of ownership is otherwise known as a tenants in common ownership.

    Triple Net-tenants in common rental properties can be either single tenant triple net or multi-tenant triple net rental properties, and are commonly converted into such through a master lease. This type of lease is structured in such a way that they lease the rental property back from the property investor on a triple net basis.



    Tenants In Common-triple net advantages include:

    1. Freedom from the hassles of day-to-day management

    2. Readily available rental property

    3. The opportunity to invest in higher-quality institutional rental properties

    4. Assistance with the entire exchange process

    5. Flexible investment sizes based on rental property type and location

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