Advanced Abstract can assist you with a 1031 exchange in Allentown PA, Bethlehem PA, Easton PA, Reading PA or Stroudsburg PA. A 1031 exchange is special type of property transaction that allows an investor to defer capital gains tax. As an investor, if you sell a property and re-invest the proceeds in a new property, then you can defer the capital gains made on the sale of the property.
There are many guidelines and conditions when it comes to 1031 exchange. First there is the timeline. There is a strict 45 / 180-day timeline in which the exchange must take place and be completed. An investor has 45 days to find a new property after the sale of a current property. The exchanger then has a further 135 days in which to acquire the new property.
The second important guide line is that of like-kind. This means the property needs to be some type of qualifying real estate. The third guideline is that the property sold and the new property must be held for investment. For example, you cannot sell your primary residence and benefit from the 1031 exchange.
Another guideline refers to equal or greater debt and equity. This means the investors needs to use all the equity and replace all the debt of the property sold. It is possible to do a partial exchange and pay the applicable capital gains tax.
There are other conditions such as the use of a qualified intermediary. A 1031 exchange is a method that uses capital gains tax to encourage investment. There are always risks in real estate and there are risks associated with a 1031 exchange. You can lower your risk be consulting a 1031 exchange expert such as Advanced Abstract. They can help you with 10131 exchanges in Allentown PA, Bethlehem PA, Easton PA, Reading PA or Stroudsburg PA.
1031 Exchange and Real Estate Title in Allentown, Reading, and Stroudsburg PA. Offering Escrow Service, Abstracts, Title Insurance. We do Title Search, write Title Policy.