Don't Pay Capital Gains / 1031 Exchange Basics

Have you ever felt that pang of regret when a chunk of your investment gain ends up with the tax folks? Well, let's chat about the 1031 Exchange, a nifty strategy that might just be your new best friend in the investing world. Imagine keeping more of your hard-earned money to invest in the next big opportunity. That's the magic of the 1031 Exchange— allowing you to grow your investments instead of trimming them down with each sale.

Now, you might be wondering, "Is this 1031 thing for everyone?" Well, it's not a one-size-fits-all kind of deal, especially not for your cozy home. But if you've got an investment property and you're eyeing another, you're in luck. Curious about whether you can swap a rental house for an apartment complex? Or maybe trade a commercial space for a retail spot? We are here to guide you through these questions with clear, straightforward talk, no tax gibberish in sight. We'll walk you through the essentials of how a 1031 Exchange works, step by simple step, to make sure you're set up for success and savings on your next real estate venture.

In this episode, you’ll learn:

• What a 1031 exchange is
• What types of properties qualify for a 1031 exchange
• Primary benefit of a 1031 exchange
• Procedural steps involved in a 1031 exchange
• How 1031 exchanges work in various situations

Must-listen moments: 

[00:00:45] What is a 1031 Exchange?: At this moment, the host provides a clear and concise definition of a 1031 exchange, setting the stage for deeper discussion.

[00:01:30] The Origin of '1031': The host explains why it's called a 1031 exchange, referencing the specific section of the Internal Revenue Code, which helps demystify the term.

[00:03:00] What qualifies as like-kind property, a core concept in understanding 1031 exchanges.

[00:04:00] The 1031 exchange is only applicable to investment or business properties, not personal residences.

 

[00:05:00] How a 1031 exchange can defer capital gains taxes, a key benefit for real estate investors.

[00:06:00] An overview of the procedural steps involved in executing a 1031 exchange 

[00:07:00] Timeframe for property identification: The host explains the 45-day rule for identifying potential replacement properties, a critical deadline in the process.

[00:08:00] Closing Deadline: The 180-day closing requirement.

[00:09:00] How different types of properties can be exchanged.

[00:10:00] Converting vacation homes into rental properties for a 1031 exchange.

RESOURCES:

IPX1031 - Intermediary

Asset Preservation Incorporated - Intermediary

Securitas1031 - Intermediary

IRS Fact Sheet about Like-Kind Exchanges

👉TikTok: @loanwithjen
👉Instagram: @loanwithjen
👉Facebook: https://www.facebook.com/loanwithjen 

Jennifer Hughes Hernandez, Legacy Mutual Mortgage - Equal Housing Opportunity Lender NMLS #514497 

💻 Documents Needed to Get Pre-Approved Texas: http://checklist.loanwithjen.com/
💻 Loan With Jen | Do Business With Us!: http://apply.loanwithjen.com/
💻 Visit My Website - Mortgage Lender Houston | Loan With Jen Education - https://www.loanwithjen.com/

📌More Helpful Content:
▶️The Myths and Truths About Credit Inquiries: https://youtu.be/d_RQJnTsVPE
▶️Why You Should Use A Local Lender: https://www.youtube.com/watch?v=shkijZmEonA ▶️How to Buy A House With Low Income: https://www.youtube.com/watch?v=OcyjWe0snWU
▶️Using Rental Income To Qualify For A Mortgage: https://www.youtube.com/watch?v=kv0eXzl1YUo

To contact us visit www.loanwithjen.com

 
Equal Housing Opportunity Lender NMLS# 514497

Click Follow on your podcast app and share the show with a friend who’s thinking about buying a home in the Houston, TX area.

Resources mentioned in the episode:

https://www.loanwithjeneducation.com/

https://www.instagram.com/loanwithjen/

https://www.facebook.com/loanwithjen

https://www.youtube.com/channel/UCFrSijIoUv59fxf0hXMro7g

https://www.linkedin.com/in/loanwithjen/

https://twitter.com/LoanWithJen