1031 Tax Exchanges
By The CAAGroupLLC.com

It's a basic fact that the large tax burden that often accompanies the sale of an investment property can be a troubling issue for many property owners.  Thankfully, this burden can be removed through an Exchange of real estate, effectively trading one investment property for another.  The 1031 Tax Deferred Exchange offers a great solution for those needing to defer the capital gains tax that arises with the sale of real estate.

A successful exchange results in the taxpayer being able to utilize 100% of the proceeds from the sale of property to purchase a new property thereby deferring the capital gains taxes.

Real Estate owners can accomplish virtually any investment objective with §1031 Exchanges including greater leverage, diversification, improved cash flow, geographic relocation, and/or property consolidation.

If you are involved with investment real estate in any capacity whatsoever - whether experienced or a novice - you'll find the information offered at this site to be a powerful resource.  Of course, this information is not intended to replace qualified legal and/or tax advisors.  Every taxpayer should review their specific transaction with their own legal and/or tax counsel.

Here you'll find tips, techniques and strategies for the Exchange of investment real estate properties as well as comprehensive information about every critical aspect of the actual process itself.  This includes Tenant-In-Common ("TIC") and Delaware Statutory Trust ("DST") purchases, an exciting niche that is expanding dramatically for several reasons.

A 1031 Exchange into a fractional ownership interest (Tenant In Common or Delaware Statutory Trust) allows property owners to exchange their management-intensive property for an institutional grade property with the potential to generate steady income, tax benefits and appreciation potential.   In addition, it is often difficult in the short 45 day time frame to locate a property that has the right purchase price and debt ratio to meet the 1031 requirements, can be closed in a timely manner, and arrange for any financing that may be required.  A Tenants In Common ownership interest has a number of additional advantages:

The purchase of a TIC ownership interest may solve many of the issues involved in successfully completing a §1031 Exchange.  TIC advantages include:
  • Economies of scale
  • No active management hassles
  • Potential increased after-tax cash flow
  • Pre-arranged, usually non-recourse, financing
  • Can be identified & closed in a timely manner
  • Investment can often be diversified into more than one property

How will a Tenants-In-Common 1031 Exchange benefit you?

With a TIC 1031 Exchange, you no longer have to feel burdened by your real estate.   Through your management contract, a manager will be retained to manage the asset while you enjoy all the benefits of income property ownership - with no property management duties.

Your income from the replacement property may be higher than what was being received from the original property.  You can potentially earn cash flow that may be up to 60% sheltered by the depreciation of the new basis in your TIC purchase.

Tenant-in-common offerings typically begin with a cash-on-cash return of approximately 7% to 8%.  Of course, this is real estate, so the cash flow can fluctuate, up or down, based on many factors including, but not limited to, changes in tenant occupancy, expenses, market conditions and environmental issues.

Those who will benefit from the information include:

  Property Owners   Real Estate Brokers
  CPA's / Tax Advisors   Lawyers
  Property Asset Managers   Insurance Professionals
  Lenders   Anyone Involved with Investment
  Consultants   Real Estate Issues

The availability of a comprehensive knowledge base dealing with all aspects of a 1031 Tax Deferred Exchange has, up to now, been lacking and very hard to come by.  You'll find this site to be one of the few places where you can easily collect the information you need and find the answers to your questions... on the entire 1031 Tax Deferred Exchange process, from start to finish.