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The purchase and sale of real property is a smart wealth-building tool. But property owners may lose valuable investment funds when the sale of an investment property requires the payment of capital gains taxes. Surety’s 1031 exchange services empower investors to preserve equity and save tax dollars through tax-deferred exchanges. Under Section 1031 of the Internal Revenue Code, you can defer the payment of capital gains taxes when you sell investment property and acquire “like kind” replacement property.
A 1031 exchange transaction typically requires the assistance of a qualified intermediary, like Surety. When you work with Surety, you have peace of mind knowing your transaction is in the hands of an industry leader.
- Nationwide service from knowledgeable, experienced 1031 exchange attorneys and professionals
- Qualified intermediary services for all types of exchanges, including simultaneous, deferred, reverse and improvement exchanges
- Personal attention
When you sell your interest in investment property, you may incur federal capital gains taxes and, in some states, state taxes as well. Your attorney, tax advisor or real estate professional may suggest a tax-deferred exchange under Section 1031 of the Internal Revenue Code. A tax-deferred exchange allows you to dispose of investment properties and acquire “like-kind” properties while deferring federal capital gains taxes and depreciation recapture. Most states with a capital gains tax offer a similar tax advantage. The bottom line: a tax-deferred exchange allows you to reinvest sales proceeds that would otherwise be paid to the government in taxes.
Improvement / Build-to-Suit Exchanges
An improvement exchange occurs when a taxpayer wants to acquire replacement property and build improvements on it during the exchange period. This usually happens when the taxpayer determines that he or she will have exchange funds in excess of the cost of the replacement property. The excess equity is used to construct improvements on the replacement property.
Personal Property Exchanges
Similar to real property exchanges, a personal property exchange provides the opportunity to defer capital gains taxes and depreciation recapture.
In an ordinary sale of your personal property investments, you are taxed on capital gain as well as depreciation recapture. The recognition of the two combined is often considerable, as many personal property assets are frequently depreciated down to little or no tax basis. Therefore, your tax attorney or tax advisor may suggest a tax-deferred exchange under Section 1031 of the Internal Revenue Code.
A 1031 tax-deferred exchange allows you to dispose of your personal property investments while deferring capital gains tax and, in most cases, depreciation recapture.
A reverse exchange occurs when a taxpayer wants to acquire replacement property prior to the closing of the relinquished property. Although common terminology calls this type of transaction a “reverse exchange,” the taxpayer does not actually acquire the replacement property first and dispose of the relinquished property later. Instead, the taxpayer must arrange for an Exchange Accommodation Titleholder (EAT) to take title to either the relinquished property or the replacement property.
This allows the taxpayer to comply technically with the “relinquish first, replace later” order, while satisfying a market requirement to close on the replacement property.
With the strength, security and reputation of Surety, you can be assured that your reverse exchange will be handled with the utmost competence and efficiency.
With Surety, you are working with the industry’s top professionals. Our team will close your transaction smoothly and quickly with single-point responsibility and accountability regardless of property location, number of properties or number of participants.
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