1031 Exchanges

1031 Exchanges and Section 121

Nannette Rodin DiMascio DiMascio
Realty ONE Group
(702) 498-2445

Email Nannette

www.LasVegasRealty.CC
www.RealtyLasVegas.US
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www.Buy-Las-Vegas-Realty.com

Thanks to IRC §1031, a properly structured exchange allows an investor to sell a property, to reinvest the proceeds in a new property and to defer all capital gain taxes. IRC §1031 (a)(1) states:

"No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment."

"Like Kind" property, in regards to real estate signifies any kind of real estate. For example, a person can exchange a commercial property for residential.

This is an exciting concept that can save you significant amounts of capital.

The following Q&A is from our Las Vegas Association of Realtors:

DEAR BOB: My impression is the IRS does not try to recapture depreciation upon the death of an income property owner. If this is correct, what happens to the depreciation and deferred tax capital gain upon death for an investment property acquired in a tax-deferred exchange? Wouldn't this make Starker exchanges even better than you have explained? – Tom C.

DEAR TOM: Can you keep a secret? Don't tell your senator or congressperson. Death is the ultimate and greatest tax shelter of all.

When you die, any capital gain that would have been taxable if you sold an asset before death, such as an apartment building, is completely forgiven by Uncle Sam. Even better, your heirs will receive a new stepped-up basis to market value on the day of your death for assets inherited from you.

However, I must hasten to explain the net market value of your assets owned at the time of death that exceed $1 million, if you die in 2003, will be subject to federal estate tax. For more details, please consult your personal tax adviser.

Section 121 of the US tax code states that,

"Gross income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer's principal residence for periods aggregating 2 years or more."

The link to Section 121 information provides further explanation of this law.

1031 Seminar in Las Vegas

Joe Callaway, Division Manager is the Featured Speaker on the following topics:

	Understand basic §1031 exchange principles and procedures
	Analyze the local market and apply creative §1031 exchange strategies to stimulate new business and solve a wide range of investor problems
	Complete §1031 Exchange closing procedures will be discussed

Date: May 16th, 2003 (Friday)

Time: 6:30 p.m. – 7:30 p.m.

Where: Stewart Title company
2451 S Buffalo Dr
On Buffalo, just north of Sahara

Click for Map

Click here to learn in depth about 1031 Exchanges

Click here to learn about Section 121