Tax Deferred Exchanges

The Real Estate investment specialists at Ruth Realty  understand the processes and procedures involved in properly identifying potential properties for 1031 tax exchanges.

We can help you evaluate prospective properties and guide you through the 1031 Tax Exchange procedure quickly and easily. For those of you who may not be familiar with the process or the possibilities, here is a quick overview of the program.

IRC Section 1031
Often investors do not realize taxation on a personal residence is far different than taxation on income or investment property. The Taxpayer Relief Act of 1997 changed Internal Revenue Code treatment for the sale of a personal residence to allow a single taxpayer a $250,000 exclusion from capitol gain. Married couples receive a $500,000 exclusion. The taxpayer must have resided in the property two of the last five years. This exemption may be used once every two years.

Benefits of Exchanging
Prior to 1979, trading properties was at best complicated. Completing a tax deferred exchange meant properties had to be "swapped" simultaneously. This made exchanging properties complicated and risky, if not impossible. In 1979 a ruling from the U.S. 9th Circuit Court of Appeals enabled the non simultaneous or "delayed" exchange to qualify for tax deferral. This finally allowed investors the time they needed to find other suitable properties without delaying and/or losing the sale of their property while they found suitable "new" investment properties.

Commonly Asked Questions About 1031 Exchanges
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