Green Valley Arizona Investor Services

Tax-Deferred 1031 Exchanges

Short Sales & REO Foreclosure Sales

Preserving equity and saving tax dollars adds up to a wise investment.

Do you have investment real estate in Green Valley Arizona that you want to sell but are hesitant to do so because of the tax consequences?

Are you considering selling investment real estate (an apartment complex, a commercial property, acreage, farm or ranch property,etc.) in another part of the United States that has increased significantly in value - yet are hesitant to do so because of the steep capital gains taxes you're likely to incur?  Using 1031 Exchange might be the perfect way to preserve your equity and build future wealth.  

A tax-deferred exchange (1031 Exchange) allows you to preserve your wealth through reinvestment in "like-kind" assets. A 1031 exchange is a powerful tool that can work to your financial advantage.

When you sell an investment property, you may incur federal capital gains taxes and, in some states, state taxes as well. Consult your financial advisor or tax professional regarding your use of the Section 1031 of the Internal Revenue Code.

A tax-deferred exchange allows you to dispose of investment properties and acquire "like-kind" properties while deferring federal capital gains taxes. Bottom line: a tax-deferred exchange allows you to reinvest sales proceeds that would otherwise be paid to the government in the form of taxes.

Following carefully defined limits, this section of the Code permits you to carry forward the gains you’ve made on one property into another one, deferring the capital gains taxes an dthis allowing the fill use of your equity in the acquisition. An exchange can be much more advantageous than the sale of one property and the purchase of another.

Defining "Like Kind"

And real or personal property can be exchanged, provided it is held "for productive use in a trade or business" or "for investment" and is exchanged for a property of "like kind" that will also be held for one of these same purposes. "Like Kind" does not mean exactly the same, particularly with the exchange of real property. For example, a single family rental unit may be exchanged for other real property like a warehouse, retail center, office building, farm properyt or even a leasehold interest in areal estate of 30 years or more.

General Requirements

• The replacement property (or properties) must be identified to Exchanger within 45 days of the transfer of the first relinquished property.
• The property exchange must be handled by a certified, intermediary Exchanger.
• The acquisition of the replacement property must be completed by specific time lines as stated in the Code.

Fully Deferred Exchanges

For your exchange to be fully tax-deferred, the replacement property must be equal or greater in value and equity than the relinquished property. These specific rules do change over time and it’s best to consult your financial advisor or tax professional for current Code rules.

Bank Owned Properties & REO Properties

REO stands for "Real Estate Owned". These are properties that have gone through foreclosure and are now owned by the bank or mortgage company.  It’s commonly assumed that any REO must be a bargain and an opportunity for easy money.  Click here to learn more about purchasing REO & Foreclosure Properties.

Short Sales

Short Sales are when a lender agrees to accept a payoff on a home mortgage that is less than what the owner of the property actually owes on the mortgage.  The benefit to the lender is that the foreclosure process & related expenses are avoided.  When buying a short sale property an investor may be able to acquire the property for thousands less than the loan balance.  Jumping into the short sale arena requires patience, as banks, working on multiple short sales are often slow to respond to offers to buy.  Follow this link for additional short sale information.