From the time that the relinquished property closes, the Exchanger has a 45 day window within which to identify the replacement property. Have you found an option to purchase or thinking of selling your current Hawaii Property to participate in a 1031 Exchange? Contact Us.įour Ways to Conduct a 1031 Exchange A Delayed Exchange - The most common way to complete a 1031 Exchange, under this method, the Exchanger obtains a Qualified Intermediary (QI) to prepare an exchange agreement for the sale of a relinquished property. Remember, on the buying side / replacement side, the Sellers must agree to being a part of the 1031 Exchange at no liability or cost to them. Search all Hawaii Real Estate Properties for options that suit your needs in terms of price, size, location, etc. But it’s also one of the most under-utilized. Undoubtedly, this makes Section 1031 one of the greatest wealth building tools in the tax code. In addition to which, typical withholdings, such as HARPTA (7.25% of amount realized) and FIRPTA (generally 15% of amount realized) are not applicable when conducting a qualified 1031 Exchange. Known as a 1031 Exchange or 1031 Tax-Deferred Exchange, this type of transaction allows an investor to reinvest the proceeds from the sale without having to pay additional taxes - which can be quite substantial. Thinking of conducting a 1031 Exchange in Hawaii? Contact Us Todayīut thanks to IRS' Section 1031 of the tax code, an investor can sell their old investment property (relinquished property) and use all of the equity to purchase a new investment property (replacement property) - all while deferring the capital-gains taxes that would usually be applied to the sale. Time to speak to a tax advisor and/or financial planner. Usually, when an investor sells an investment property for a greater value that what was paid for it originally, any profit from the sale is subject to capital-gains tax. Hawaii 1031 Exchanges 1031 Exchanges - Growing Wealth Smartly.
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