with a 1031 Exchange
Not all agents have the experience and training to handle sophisticated real estate transactions, such as the sale of residential investment properties. I have handled many successful tax-deferred exchanges — both sales and purchases. Let me help you get started by answering some of your questions on this topic. Please feel free to contact me for help with buying or selling your residential investment properties.
What is a Tax-Deferred Exchange?
A 1031 exchange (also known as a Starker Exchange) is a process that allows real estate investors to defer paying capital gains tax on investment or business property at the time of sale.
What is the criteria for a tax-deferred exchange?
The properties must be “like-kind.” For example, townhouse rentals, land, farms, or vacation rentals.
Can I trade several small properties for one?
Yes, and vice-versa, provided they are “like kind” and you abide by current guidelines.
How is the capital gain calculated?
A capital gains tax is based on the profit plus all the depreciation taken on the “old” property.
What is “boot” in an exchange?
“Boot” is unlike property received in an exchange, such as cash, notes, personal property and reduction in mortgage, which is subject to taxation.
Can my Realtor® handle a tax-deferred exchange for me?
YES and NO… you can hire me to find a buyer for your “old” property or to help you find “new” property; I can help you meet the deadlines, provide required notifications, and answer your questions. However, I cannot serve as your qualified intermediary – the middle man who is required for facilitating your exchange.
How can I find a qualified intermediary?
I can refer you to a professional who specializes in this. The fee for a qualified intermediary is usually about $1000-1500, and less for additional properties in the same exchange.
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- Email: mwoda@remax.net
- Website: www.MargaretWoda.com
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Crofton Maryland Real Estate
Copyright 2006. All rights reserved. Margaret Woda
