5 Benefits of doing a 1031
Avoid Taxes Forever
A 1031 Exchange is a 100% LEGAL way to avoid paying ANY income taxes on any gains derived from your real estate investment properties. All gains generated from the sale of your relinquished investment property is rolled over to your new replacement property (s). There are an unlimited number of times you or your heirs can successfully rollover gain and postpone tax. Below are the estimated taxes you will avoid paying:
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Depreciation Tax
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Federal Capital Gains tax
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3.8% Medicare Tax
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State Capital Gains Tax
Example: You sell $2,000,000 paid off asset
Without 1031 Exchange-You'll pay estimated $600,000 in Taxes (On Average 30% of Gain)
With 1031 Exchange-You'll pay $0 taxes
Highly Liquid
When you do a 1031 you can pull TAX FREE CASH OUT of your replacement properties by mortgaging them after completion of 1031 Exchange. Our typical client accomplishes this with a 60%-70% LTV Blanket Mortgage.
Higher Cap Rate
A 1031 Exchange is a proven plan to liquidate 1 asset in a high Tier Market & acquire multiple assets in lower tier markets that collectively generate a higher ROI. Our typical 1031 client exchanges a commercial property with a low yielding cap rate for multiple residential rentals with higher yielding cap rates.
Proven Way to Fund Your Retirement
Our typical 1031 client funds their retirement by collecting $10,000 to $25,000 or more per month in positive cash flow via exchanging their commercial property for multiple residential rentals.
Powerful Estate Planning Tool
When you complete a 1031 Exchange ANY & ALL Capital gains taxes you owed on the sale of your highly appreciated investment property are eliminated upon your death and totally forgiven by the IRS. Your real estate investments will be bequeathed to your Heirs with a step up in basis on the date of your death. In essence all your gain is wiped out and your heirs start fresh from where you finished. Passing your real property assets on to your heirs with absolutely no tax bite is one of the most powerful estate planning tools in USA.