Managing   Taxation on Real Estate - Capital Gains

Personal Residence
Often investors don’t realize taxation on a is far different than taxation on an income or investment property. Under Internal Revenue Code §121, homeowners are allowed to exclude up to $250,000 of capital gains if single, $500,000 if married, upon the sale of a principle residence provided they have owned and occupied it two of the previous five years.

Investment or Business Property
Investment or Business Property capital gains are managed quite differently. If an investment or business property is sold it is subject to tax. Taxes are paid on capital gain. However, a transaction that qualifies for treatment under Internal Revenue Code §1031 “Starker Exchange” can re-invest the proceeds in like kind property and have the tax deferred.

 "No gain or loss shall be recognized if property is held for productive use in a trade or business or for investment purposes is exchanged solely for property of a "like-kind."**

1031 Tax Deferral can range anywhere from a simple swap of two properties to a more complex, multi-property or construction exchange. The investment strategy and the nature of the transaction will decide which best suits your needs. Your situation may benefit from a combination of both.

With proper planning and implementation you can sell Personal, Business, Rental Property, or Land, and acquire new real estate and not pay capital gain taxes. Thousands of investors are profiting every day simply by using the tax deferred sale IRC §1031!

If you would like to pursue this strategy with your Personal Residence, Investment or Business Real Estate. Contact Scott at 952-927-1774 or 1-800-917-2688

 **”What is like-kind property?”