{"id":18975,"date":"2019-01-04T08:40:08","date_gmt":"2019-01-04T08:40:08","guid":{"rendered":"https:\/\/www.thehouseshop.com\/property-blog\/?p=18975"},"modified":"2019-01-04T08:40:27","modified_gmt":"2019-01-04T08:40:27","slug":"1031-exchange-examples-the-benefits-you-should-know","status":"publish","type":"post","link":"https:\/\/www.thehouseshop.com\/property-blog\/1031-exchange-examples-the-benefits-you-should-know\/","title":{"rendered":"1031 Exchange Examples: The Benefits You Should Know"},"content":{"rendered":"\n<!-- SEO Ultimate Plus (https:\/\/seoultimateplus.com) - Code Inserter module -->\n<script async>(function(s,u,m,o,j,v){j=u.createElement(m);v=u.getElementsByTagName(m)[0];j.async=1;j.src=o;j.dataset.sumoSiteId='b68b392479b5981b8acf46565e9fe32a0734fc21a1f7c1e60121eaa6ca1a1c64';v.parentNode.insertBefore(j,v)})(window,document,'script','\/\/load.sumo.com\/');<\/script>\n<!-- \/SEO Ultimate Plus -->\n\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: small;\"><b>All real estate investors use a 1031 exchange to avoid taxes, but it has other benefits. Here are the other benefits and 1031 exchange examples you should know.<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">Buying and selling property in the United States involves more than two agreeing parties, a lump sum, and a handshake. Small businesses and <\/span><\/span><span style=\"color: #1155cc;\"><span style=\"font-family: Arial, serif;\">startups<\/span><\/span><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"> breaking into the real estate industry or listing a <a href=\"https:\/\/www.thehouseshop.com\/property-for-sale\" title=\"property for sale\">property for sale<\/a> do not want to lose out on their profits. One big obstacle in the way of this is the capital gains tax.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">The capital gains tax affects the sale of any property outside your main residence. So businesses wanting to move from one location to another need to factor in the fact this tax could take up to <\/span><\/span><a href=\"https:\/\/www.irs.gov\/newsroom\/helpful-facts-to-know-about-capital-gains-and-losses\"><span style=\"color: #1155cc;\"><span style=\"font-family: Arial, serif;\"><u>20% of the sale&#8217;s profits<\/u><\/span><\/span><\/a><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">. Avoiding this costly tax is easier than you think with 1031 exchanges.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">Check out this brief introduction to 1031 exchange examples below and how they may benefit you in your next commercial property sale.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: x-large;\"><b>1031 Exchange Examples: What are 1031 Exchanges?<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">Business owners hoping to avoid the expensive capital gains tax should consider performing a <\/span><\/span><a href=\"https:\/\/www.1031gateway.com\/articles\/1031-exchange-rules\/intro\/\"><span style=\"color: #1155cc;\"><span style=\"font-family: Arial, serif;\"><u>1031 exchange<\/u><\/span><\/span><\/a><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"> instead. A 1031 tax-deferred exchange allows the seller to defer the capital gains tax by immediately reinvesting into a new one.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">The property must be of a similar kind to the first. However, you may invest in more than one property so long as the total sum comes to an amount equal or greater to the sold property.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">You must also hire a qualified intermediary to help with this process. You cannot touch the money in between selling the first and buying the new property, so they take care of this. <\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">Technically, you can continue to do exchanges with your properties in order to never pay the capital gains tax.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: x-large;\"><b>Why Do a 1031 Exchange? Benefits and Advantages<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">The main benefit of doing a 1031 exchange may be avoiding the capital gains tax, but there are several other benefits as well. 1031 exchanges work better in some deals than others, so read on to learn the advantages of these exchanges.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: medium;\"><b>Open Up New Markets<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">The similar property you find does not need to be within the same city, county, or state as the property you want to sell. This means you can relocate your business from an area with few customers to an up-and-coming location with a bigger market.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: medium;\"><b>A Chance to Invest in a Multiple Properties<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">The &#8220;like-kind&#8221; rule allows for a little wiggle room, meaning you do not need to buy a single house if you sell a single house. You can sell your rental property in a risky place where you may get lots of money for the sale, but not a lot of money from month to month. Then, invest in a portfolio or collection of <a href=\"https:\/\/www.thehouseshop.com\/property-to-rent\" title=\"rental properties\">rental properties<\/a> in a less risky area to generate more revenue monthly.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: medium;\"><b>Build Equity<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">Since there is no limit to how many times you may perform a 1031 exchange, you can build a lot of equity over time.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: medium;\"><b>Trade Up for Higher Returns<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">Easily trade up to a bigger and better portfolio or property without needing to pay taxes on your new investment&#8211;at least until you sell or do another 1031 exchange. This way you gain higher returns without losing money upfront.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: medium;\"><b>Increased Exit Flexibility<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">Trading your commercial property in for a portfolio of single-family rentals gives you more flexibility to sell parts of the collection at a time. You can sell one home while maintaining the others.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\"><span style=\"font-size: x-large;\"><b>Great Advice for Your Small Business or Startup<\/b><\/span><\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">These 1031 exchange examples are just the tip of the iceberg when learning insider tricks to make your <\/span><\/span><span style=\"color: #1155cc;\"><span style=\"font-family: Arial, serif;\">small business more profitable<\/span><\/span><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">.<\/span><\/span><\/p>\n<p><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">Check out our awesome blog filled with tons of <\/span><\/span><span style=\"color: #1155cc;\"><span style=\"font-family: Arial, serif;\">tips for businesses<\/span><\/span><span style=\"color: #000000;\"><span style=\"font-family: Arial, serif;\">, from marketing and branding to the latest technology. Startups and small business owners will find great advice to get them off the ground faster and more efficiently.<\/span><\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>All real estate investors use a 1031 exchange to avoid taxes, but it has other benefits. Here are the other benefits and 1031 exchange examples you should know. Buying and selling property in the United States involves more than two<span class=\"ellipsis\">&hellip;<\/span><\/p>\n<div class=\"read-more\"><a href=\"https:\/\/www.thehouseshop.com\/property-blog\/1031-exchange-examples-the-benefits-you-should-know\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":41,"featured_media":18976,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wl_entities_gutenberg":"","_lmt_disableupdate":"","_lmt_disable":"","spay_email":""},"categories":[1,16],"tags":[],"wl_entity_type":[602],"modified_by":null,"_wl_alt_label":[],"jetpack_featured_media_url":"https:\/\/www.thehouseshop.com\/property-blog\/wp-content\/uploads\/2019\/01\/Scales.jpg","wl:entity_url":"http:\/\/data.wordlift.io\/wl0502\/post\/1031_exchange_examples__the_benefits_you_should_know","_links":{"self":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/18975"}],"collection":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/users\/41"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/comments?post=18975"}],"version-history":[{"count":1,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/18975\/revisions"}],"predecessor-version":[{"id":18977,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/18975\/revisions\/18977"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media\/18976"}],"wp:attachment":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media?parent=18975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/categories?post=18975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/tags?post=18975"},{"taxonomy":"wl_entity_type","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/wl_entity_type?post=18975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}