San Diego commericial real estate
If you are going to invest in commercial properties, there is no better place than in the San Diego Area. Contact a San Diego commericial brokers who can guide you toward more profits taking advantage of the 1031 exchange.
The name 1031 Exchange, comes from the Internal Revenue Code Section # 1.103) is a code that can end up saving individuals money on certain business and investment property transactions. If any profits were made from the sale of real estate property or personal property, then ‘Profit or Capital Gain’ taxes will have to be paid. However there might be an exception.
The 1031 Exchange allows sellers of some real estate and personal property to be exempt from paying the ‘capital gains’ taxes if they are “exchanging” the property they sell, for a new property of “like-kind”. Keep in mind that this code only applies to business property and investment property.
A great example of this would be selling a property which had been used as an office, and then buying a similar property to be used for the same purpose.Any profits made on the sale are subject to be taxed. As long as it is going to be used for the same purpose as the one sold, the new property does not have to be the same size or type.A property purchased for investment purposes can be sold to buy a different property for investment purposes, without taxing the profit. The definition of exchanging for a “like-kind” property allows for a great deal of flexibility.
There are time factors to be considered. The purchase of the new property must take place within 180 calendar days of the sale of the original property.Many buyers can find it more efficient to make the sale and purchase as close in time as possible. The 1031 law requires a qualified intermediary after 45 days of the sale to ensure that the gains are used towards the purchase of the new property. Sometimes this will prevent many people from using the profit for their financial gain.