Selling an income-producing property leaves many questions. One of the most important questions to answer is how much you will pay in capital gains taxes. But taxes may not need to be something you address if your income-producing property is part of a 1031 exchange.
A 1031, which is sometimes referred to as a “like-kind exchange,” is a tax-deferred swap of one asset or business for another. Tax is only applied when you trade the exchanged property for cash.
Only investments and business property can be swapped to take advantage of the tax deferment. Property for personal use, such as primary residences, may not be exchanged. Vacation homes qualify, but only under strict conditions that a 1031 attorney can help you understand. Property held for resale also does not qualify for 1031.
You must close on the acquisition within 180 days of the date you closed on the property you relinquished.
Before proceeding into a 1031 exchange, consult with an attorney who understands the complexities of it and can steer you clear of common mistakes.
If a 1031 exchange is suitable for your transaction, you need an attorney who understands the right way to help you execute it. This process, if not handled by a detail-oriented attorney, could leave you with an expensive mistake. The Law Office of Curtis J. Butcher has worked with large businesses and individuals, guiding them through the process to avoid the traps.
The Law Office of Curtis J. Butcher offers free consultations to discuss 1031 property exchanges. Attorney Curtis Butcher has more than 40 years in helping businesses and individuals across Indiana and beyond state borders achieve their real estate goals. He will put his knowledge to use in helping you avoid costly mistakes and ensure a smooth exchange.
If you’re considering a 1031 property exchange on real estate or other properties, you need to speak with a knowledgeable attorney. Set up a free consultation with Curtis Butcher in Carmel, Indiana. He will sit down with you and help you understand each step of the process for a successful exchange.