RG 009 – 1031 Exchanges: Tax Advantages for Investors in the U.S. with William Exeter
In case you missed it, here are some of the highlights from our conversation with William Exeter from Exeter 1031 Exchange Services:
- Founder of Exeter 1031 Exchange Services: One of the leading 1031 businesses in the U.S. http://www.exeter1031.com/
- Over 30 years experience in the tax deferment industry
- Avid scuba diver: Bad Monkey Divers – Cozumel, Mexico
- Specializes in tax deferments programs to help maximize long term wealth.
Nuts and Bolts:
Tax Advantages for Investors in the U.S. – 1031 Exchange
- Simply put, a 1031 exchange allows any investor to sell an investment property and defer all related taxes as long as they reinstate the capital gains into another real estate deal.
- Unique to the U.S. only.
- Length of time an investor must hold an investment property before they can qualify: minimum 1 year and 1 day.
- Investors must 1st determine if they will be incurring any taxes, i.e: the sales price is more than what the investor purchased the property for + any capital expenditure (renovations) they have out into the deal.
- 1031 exchanges is part of the IRS tax code and dates back to 1921
- Qualified use: any property held for rental income or any property held as an investment (capital appreciation – doesn’t; have to cashflow), or any property that can be used in a business
- Like Kind: Means if you are selling real estate you have to reinstate in real estate.
- Any person or any entity qualifies for a 1031 exchange – including non profit groups.
- Investors can apply 1031 exchanges to not just real estate investments: art works,
- Timeframe: Once you sell an investment property you have 45 days to identify another real estate investment, and 180 days to complete the purchase of the new property. Total of 180 days.
- Investors are allowed to identify up to 3 properties within the 45 day ‘identification period’.
- Challenges: things move quickly in todays market, so if you are consider
- Investment Strategy: ‘trade up in value’ is the #1 use for 1031 exchanges – accruing value in one property then use that increased value to purchase an even larger property (ie: sell a SFH and buy a multi family property).
- FIRPTA: A withholding requirement for international investors, 10% mandatory withhold tax: International investors can get around it and apply for an exemption if they are exchange up into a like-kind asset here in the U.S., just allow some time to process the request prior to selling the asset (60-90 days)
1031 Exchanges is a great way to leverage capital gains and grow your long-term wealth by exchanging up into larger properties!
Contact Information for William and his team:
San Diego, California
+1 (619) 239-3091 Office
Ready, Aim, Fire! Happy Investing!
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