Downtown San Diego 1031 Tax Exchange Basics

1031 Exchanges 101 for Downtown San Diego So you have your Downtown San Diego Condo For Sale. When we speak with San Diego Downtown real estate investors, the discussion of 1031 Tax Exchange comes up. Under the U.S. Internal Revenue Code, this is an opportunity for some investors to defer capital gains taxes and it is an important investment strategy.

A 1031 Tax Exchange is a way to defer taxes when purchasing Downtown San Diego Real Estate. Reasons to change or swap an old property for a newer property vary. As San Diego Realtors we know the basics about tax-deferred exchanges, but you should consult with your financial professional to explain and map out your plan for using a 1031 Tax Exchange before you engage in a Real Estate Transaction.

There are many rules and regulations on a 1031 Tax Exchange and if they are not followed exactly you could be liable for taxes. Basically you should never have to pay income taxes on the sale of property if you reinvest the proceeds in like-kind property.

Properties in San Diego Downtown that do not qualify for a 1031 Tax Exchange are:

Personal Residence
Fix/Flips for Resale
Inventory property
Construction
Partnership interests
Corporation common stock
Bonds and Notes

Types of 1031 Tax Exchanges:

Simultaneous Exchange - no interval between the two closings.
Delayed Exchange - there are rules and strict time line for this type of exchange.
Reverse Exchange or Title-Holding Exchange - when the exchanged property is purchased prior to the first property's closing
Improved Exchange - You acquire a property, schedule construction of improvements and then receive the property as an exchange.

As with all investments, please check with your Financial Advisor for more information on 1031 Tax Exchanges. Call us today for more information and see how we can assist you in your 1031 Tax Exchange in Downtown San Diego.

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Posted on October 12, 2007 12:36:30 by Gregg Neuman

Posted in Explore Your Neighborhood, Downtown Directory, Seller Guide, Buyer Guide

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