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1031 Exchange Explained

A 1031 exchange is the IRS approved method enabling the deferment of federal (and most state) capital gains taxes through the sale and direct reinvestment of all proceeds into other like kind commercial real estate commercial real estate. By deferring any applicable taxes, the real estate investor has more money available to invest in other commercial real estate. In effect, you receive an interest free loan from the federal government in the amount you would have paid in taxes.

When combined with a 1031 exchange, tenants in common commercial real estate can be even more attractive. 1031 Exchanges allow you to defer capital gains taxes by investing in a like commercial real estate. When using tenants in common commercial real estate with a 1031 exchange, you can defer capital gains while diversifying your investments. You can purchase shares of various tenants in common commercial real estate in different locales with the proceeds of the 1031 sale.

If you are considering the sale of an investment commercial real estate, contact a specialist today to discuss your 1031 exchange options.