Consider This

Whether an investor owns a property all cash or with leverage, the benefits of tax deferral are significant. The tax dollar saved can be utilized to purchase additional property. The example below shows the significant advantage of exchanging for an investor who sells a $400,000 property that has been fully depreciated and that was debt-free. This assumes the client is subject to a combined federal and state tax bracket of 25%.

The investor who executed a successful 1031 Tax Deferred Exchange defers the payment of capital gain taxes.

 
Resources

Consider This

Whether an investor owns a property all cash or with leverage, the benefits of tax deferral are significant. The tax dollar saved can be utilized to purchase additional property. The example below shows the significant advantage of exchanging for an investor who sells a $400,000 property that has been fully depreciated and that was debt-free. This assumes the client is subject to a combined federal and state tax bracket of 25%.

The investor who executed a successful 1031 Tax Deferred Exchange defers the payment of capital gain taxes.

By doing a 1031 Tax Deferred Exchange, the investor increased his portfolio by $430,000!

Sale

Net Equity (Minus Costs)
Taxes (25%)
Funds to Reinvest

Acquisition Value *

$400,000
($100,000)
$300,000

$900,000

Exchange

Net Equity (Minus Costs)
Taxes (25%)
Funds to Reinvest

Acquisition Value *

$400,000
$0
$400,000

$1,330,000

* Assumes the investor leverages their new property to 70% by putting 30% down.

Exchange Days Calculator

Enter the date the relinquished property (sale) was closed:


Your 45-day Identification Period ends on midnight of:

 

Your 180-day Identification Period ends on midnight of:

 

* The acquisition of your replacement property must be completed by the earlier of:
1. 180 days from the transfer of the relinquished property, or
2. The due date of filing your federal income tax return for the year in which you transferred the first relinquished property, including extensions.