1031 Exchange Los Angeles Investment Properties

REAL ESTATE NEWS (Los Angeles, CA) — Section 1031 of the U.S. Internal Revenue Code 26 U.S.C. § 1031 allows for the exchange of certain types of property, allowing the investor to defer the recognition of capital gains or losses due upon sale, and to defer the capital gains taxes.

The 1031 exchange (also called a like-kind exchange or a Starker) is a swap of one business or investment asset for another. Although most swaps are taxable as sales, with a 1031, there will be no tax or limited tax due at the time of the exchange. This allows the form of the investment to be changed without (as the IRS sees it) cashing out or recognizing a capital gain. That allows the investment to continue to grow tax deferred. The new property must be found within 45 days of old property escrow close. The new property escrow must close within 180 days after the sale of the old property.

President Biden has proposed limits to 1031 exchanges, which would have consequences for investors, and for the economy. If the proposal is approved, the most savvy of wealthy investors would likely respond by holding on to property, with the expectation that the tax code will change again in the future.

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1038 Exchange allows real estate investors to defer taxable gains.

Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Realty Source Inc, DRE 01889449. This is not an offer to buy or sell securities. All investments involve risk, including possible loss of principal. All information provided is deemed reliable but is not guaranteed and should be independently verified. This does not constitute financial advice. For financial advice, consult a certified financial advisor. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

1031 Exchange Downtown Los Angeles Investment Lofts and Condos For Sale

Under Section 1031 of the United States Internal Revenue Code (26 U.S.C. § 1031), the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due.

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A recent Forbes articles states that a 1031 exchange (also called a like-kind exchange or a Starker) is a swap of one business or investment asset for another. Although most swaps are taxable as sales, with a 1031, there will be no tax or limited tax due at the time of the exchange.

This allows the form of the investment to be changed without (as the IRS sees it) cashing out or recognizing a capital gain. That allows the investment to continue to grow tax deferred.

The new property must be found within 45 days of old property escrow close. The new property escrow must close within 180 days after the sale of the old property.

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Copyright © 2016 This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association, seller or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.