Don't Leave Money on the Table - Buying & Selling Through 1031 Exchange | By: Maureen Griffin
Show of hands, who’s glad tax season is behind us? Indulge us, if you will though, to introduce you to a little-known area of the tax-code that can save real estate investors some serious money this summer.
The Parker County housing market is HOT! Latest numbers from the North Texas Real Estate Information Systems, Inc. (NTREIS) show property prices increasing dramatically from March 2017. Our average sales price is up 14.5%. For real estate investors, their equity may be high enough to sell and reinvest. Before you “cash-out” though, Tara Stark founder of Tara Stark Real Estate Group, Keller Williams, advises us to think about doing a 1031-Exchange.
“A 1031-Exchange allows certain investment property owners the opportunity to take advantage of the equity they’ve accumulated to purchase another investment property, one of greater value, and through the exchange, the ability to defer some or all tax liabilities”, says Stark. “Don’t let the tax lingo scare you, the 1031-Exchange is a common real estate transaction we routinely assist our clients with. We partner with Qualified Intermediaries who have solid credentials in 1031 Tax-Deferred Exchanges. We will walk through the process with you, making it seamless as possible, because we are committed to making-a-difference in our clients’ lives.”
Carmine DiFulvio, a Certified Exchange Specialist (CES) with First American Exchange Company, explains why your attorney or tax advisor cannot help you with this process, “Your attorney or CPA cannot handle your 1031-Exchange if they have provided non-exchange related services with the two-year period prior to the exchange. In this case, they would be considered a disqualified party and unable to act in the capacity of a qualified intermediary. A Certified Exchange Specialist has passed an exam and completed numerous hours of continuing education focused on the 1031-Exchange process and rules, so will be able to provide a high level of service to his or her clients.”
Summertime always means more properties on the market. Whether it’s a duplex in Weatherford, a single-family property in Aledo, or a commercial building in Ft. Worth you’re looking at for your next investment, give us a call before you list your current property. The 1031-Exchange has definitive timelines that must be met to adhere to tax code. Tara Stark Real Estate Group’s mission is to “Make a Difference” for our clients, primary residents and investors. A 1031-Exchange transaction can certainly make a difference in tax liability, which eventually means a higher return on investment for you.
