Section 1031 Exchanges

The Florida real estate market provides great opportunities for investors. While every home or land purchase is an investment, there are tax benefits available to those who purchase property for the sole purpose of investing.

When you sell your home for a profit, you have to pay a capital gain tax. But if you are selling an investment property, and you replace that property with another business or investment property, you can defer the capital gain on that sale. This is called a Section 1031 Exchange, and is part of the IRS tax code.

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1031 exchanges can be complicated, and there are restrictions. Contact us BEFORE you sell, so we can make sure you don't inadvertently give away benefits.

Some things you need to know:

1. Your residence does not qualify. You must be exchanging land or property that is rented for business purposes. However, the two properties do not have to be identical (i.e. land for land).
2. There is a time limit between when you close on the sale property and when you close on the replacement property.
3. The sale money must be handled by an approved Facilitator. No one else can be involved with the money. All the money must be reinvested into the new property.
4. The title holder of both properties must be the same.

If you are interested in pursuing this opportunity, please contact us. There is more you need to know to gain the most benefit!