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Hello, and welcome back! Today, I have a few quick tips on 1031 Exchanges.
If you're an investor, you need to take advantage of 1031 Exchanges when they're appropriate. In order to do this, seek the advice of your CPA to see whether or not you should use one.
In a 1031 Exchange, when you buy a property that's worth more than the one you're selling, the amount of profit that you're taking from the sale of your first property is considered "boot". The amount you need to spend on your new property must be at least the amount of the original investment and the "boot". For example, if you buy a $1 million property and you are able to sell it for $2 million, you have $1 million in "boot". You can then turn to purchase a new $2 million home using the untaxed $1 million "boot" as an investment.
You have 45 days to identify the property you want to invest in after the initial sale if you want to qualify for a 1031 Exchange. If you have any questions about this type of investing, or if you have real estate needs of any kind, don't hesitate to give us a call or shoot us an email. We would love to give you a hand!
