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Baltimore
City -
Canton
Fells Point
Federal Hill
Baltimore
City N. -
Roland Park
Guilford
Homeland
Baltimore County -
Ruxton
Cockeysville
Lutherville
Hunt Valley
Greenspring Valley |
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Five Reasons to Exchange
" Investors can Meet Many Objectives
under IRC $1031"
Section 1031 tax deferred exchanges continue to
increase in popularity as more investors nationwide
discover the wide range of investment objectives
that can be easily met through exchanging.
I. Preservation of
Equity
A properly structured exchange provides real estate
investors with the opportunity to defer 100% of
both Federal and State capital gain taxes. This
essentially equals an interest-free, no-term loan
on taxes due until the property is sold for cash!
Most often, the capital gain taxes are deferred
indefinately because many investors continue to
exchange from one property to the next, dramatically
increasing the value of their real estate investments
with each exchange!
II.
Leverage
Many investors exchange from a property where
they have a high equity position or one that is
"free and clear" into a much more valuable property.
A larger property produces more cash flow and
provides greater depreciation benefits, which
therefore increase an investors return on their
investment.
III.
Diversification
Exchangers have a number of opportunities for
diversification through exchanges. One option
is to diversify into another geographic region
such as exchanging of one apartment builidng in
Denver, Colorado for two additional apartments
� one in Los Angeles, California and the other
in Dallas, Texas. Another diversification alternative
is acquiring a different property type such as
exchanging from several residential units to a
small retail strip center.
IV. Management Relief
Many investors accumulate several single family
rentals over the years. The on-going maintenance
and management of what can be a far-reaching group
of properties can be lessened by exchanging these
properties for one property better suited to on-site
maintance and management. Exchanging into a single
apartment complex with a resident manager is a
good example of this strategy.
V. Estate Planing
Often a number of family members inherit one large
property and disagree about what they want to
do with it. Some want to continue holding the
investment and some desire to sell it immediately
for cash. By exchanging from one large property
into several smaller properties, an investor can
designate that, after their death, each heir will
receive a different property which they can either
hold or sell. Call the knowledgable exchange professionals
at Asset Preservation for a complimentary consultation
regarding your specific investment objectives.
Information Provided
by
Asset Preservation,
Inc.
National Headquarters: 800-282-1031 or
info@apiexchange.com
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.
2000 Asset Preservation, Inc.
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