1031 question???

doodles · #1 05/12/05, 02:27 PM

Has anyone here had experience with a 1031 exchange to prevent capitol gains tax.
Angie

mysticokra · #2 05/12/05, 02:54 PM

Quote:

Originally Posted by doodles

Has anyone here had experience with a 1031 exchange to prevent capitol gains tax.
Angie

We looked at them for some real estate exchanges. They always sell them to you as an "income stream." For example, you paid 20K for a piece of property. It's now worth a million. You don't want to pay capital gains tax on the thing, so you look at a 1031 (like kind exchange). The people who package these things find other income generating properties and bundle them together. They use the income stream generated to pay you for your exchange.

What they don't tell you is that there is usually an obscene (15%) commission in the deal for them. Hell, the capital gains tax is only 15% now.

Why not pay the tax and have your full lump sum to reinvest instead of letting tax avoidance strategies take advantage of you?

susanneb · #3 05/12/05, 02:55 PM

Quote:

Originally Posted by doodles

Has anyone here had experience with a 1031 exchange to prevent capitol gains tax.
Angie

Angie,

Where are you located? One of my design firm's clients, a subsidiary of a large financial corporation, specializes in 1031 exchanges. One thing I have learned is that this is a totally unregulated industry, so you want to go with a firm with a solid reputation and firm financial backing. Feel free to send me a PM if you'd like more information.

susanne

Scott SW Ohio · #4 05/12/05, 03:17 PM

I have made one "like-kind" exchange and am preparing to do another. Do you have a specific question?

agmantoo · #5 05/12/05, 10:14 PM

I have made several 1031 exchanges as my previous land was in the path of "progress". The 1031 is a great tool, particularlly if you are wanting to increase your acreage. I am in the process of doing one as we speak. State you question.

doodles · #6 05/12/05, 11:04 PM

I am in the process of selling a property and business for 2.7 Million. I paid 1.5 a little over 4 years ago. I owe a little over 1m right now. The catch here is that I may need to do some owner financing .
My question is do I have to purchase a property of 2.7 m value even if I am not recieving all the cash at closing or do I have to remove the portion of owner finance and pay gains on that.(approx $700,000)
I really wanted to pay off my loan and invest the 1.6 that would be left over

I guess I want my cake and eat it too.
I sure hate to give the gov $200,000 of my hard earned money.