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Benefits Of 1031 Exchanges In MA

A 1031 exchange is a method for deferring taxes when selling a property and buying another. It applies to business or investment real estate. When executed properly, it may lead to dramatic savings. This article outlines the benefits of 1031 exchanges in MA.

Types of Real Estate that Qualify

You must have a qualified property before considering a 1031 tax deferred exchange. Qualified properties are ones used in a business or for investment. They can be land, residential, rental, industrial, and commercial properties. You must also intend to buy similar property that is also qualified.

Benefits Of 1031 Exchanges In MA

Typically, when you sell an investment property, you pay capital gains taxes on the proceeds from the sale. This applies despite what you plan to do with that funds. Taxes may be levied by the federal and state government. Based on how long you kept a piece of real estate and the amount of equity, the taxes due can amount to a large sum of money. A 1031 exchange allows you to put the equity from one property towards purchasing a new similar property and delay capital gains taxes until you sell that additional property. Of course, another 1031 exchange can be possible on that other property to defer taxes even further.

Preparing for a 1031 Exchange

There are many components to a 1031 exchange that you must know about BEFORE selling a property. 1031 Exchanges can not be completed after a sale is complete. You must intend to execute an exchange when selling. Particular steps must be complied with to execute the exchange. This includes time frames for narrowing down and closing on replacement property. A qualified intermediary must also be involved to administer the process. If a step is missed, all potential tax savings will be forfeited. Speak with an experienced attorney for detailed guidance on 1031 exchanges and to reap the full benefits of 1031 exchanges in MA.

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About Chris Graves

I grew up in Massachusetts, spent the majority of my young adult life in Boston, and own a home in Windham NH. I have owned properties in MA and NH. I specialize in mortgage lending in Massachusetts and New Hampshire and my company does have the ability to lend in other states. I graduated from the University of Massachusetts in Amherst Massachusetts in 2002. I have a Bachelor’s in Science. In addition to managing a team of loan officers my personal loan production is always in the top of the entire of company. I have personally been in the mortgage business for over 13 years. I pride myself with taking my clients from application to close in the smoothest and quickest way possible, while keeping them well informed during the entire process. I originate my own loans from start to finish and work hand in hand with my loan processors & underwriters to make sure I am updated to the minute with all of my files. I stay up to date with lending guidelines and speak with underwriters on a daily basis to ensure I am aware of all of the lending guidelines in place.

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