1031 Tax Exchange
in Blowing Rock, Boone, Valle Crucis, Banner Elk, Seven Devils, Deep Gap or Ashe County.
If you already own investment property you may want to consider a 1031 Tax Exchange. This rule allows you to sell your property and purchase another like kind property while deferring any capital gains taxes. A few basic rules must be followed:
1. The purchase price of the new property must be greater than the net sale of the “sold” property.
2. The properties must be held for investment or used in a business.
3. All cash and other proceeds received from the sale must be used to buy the new property. A Qualified Intermediary (Q.I.) must hold these funds.
The investor has a total of 180 days from closing the “sold” property to acquire the replacement property. The first 45 days are called the “Identification Period” and must be used to find and identify in writing to the Q.I. the new property or properties. The investor may identify up to three properties to eventually acquire at least one. If the investor chooses to identify more than 3 properties, the total fair market value of the identified properties cannot exceed 200% of the value of the relinquished property. Ace Realty specializes in property identification for homes and land in the entire High Country.
Anyone officially entrusted with handling funds for others is bound by fiduciary responsibilities. However, there is no state or federal regulation governing the conduct of Qualified Intermediaries. One should choose a company very carefully. Speak with friends, accountants, lawyers and brokers who are familiar with exchanges and ask their opinion.
As always, Ace Realty recommends you consult with your accountant regarding tax issues.
If you have question about this article or about real estate in either in Blowing Rock, Boone, Valle Crucis, Banner Elk, Seven Devils, Deep Gap or Ashe County, please give one of our professional Realtors a call today.
Ace Realty in Blowing Rock can help you with all your Blowing Rock area real estate needs. We can be reached at (828) 295-6165.