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If you own
investment property (real estate) in Southern California, you probably have
experienced equity growth in these past years. You may be reluctant to sell and
pay the tax on the gain.
Is there a way to
increase your Portfolio of Real Estate without digging into your pocket?
Consider this:
Whether an investor owns a property all cash or with leverage, the
benefits of a tax deferral are significant. The tax dollar saved can be
utilized to purchase additional property. The example below shows the
significant advantage of exchanging for an investor who sells a $425,000
property that has been fully depreciated and that was debt-free. This example
assumes the client is subject to a combined federal and state tax bracket of
35%.
The investor who executed a property 1031
Tax Deferred Exchange defers the payment of capital gains taxes.
Example
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Sale |
Exchange |
| Net Equity (minus
cost) |
$400,000 |
$400,000 |
| Taxes (35%) |
$150,000 |
None |
| Funds to Reinvest |
$250,000 |
$400,000 |
If an investor leverages his new property to 70% by putting 30% down,
he/she could purchase properties totaling:
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Acquisition
Value |
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| $833,000 |
$1,300,000
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By completing a 1031 Tax
Deferred Exchange, the investor has increased his/her portfolio by
$467,000!!!
Remember rental houses qualify as
investment property. The 1031 Tax Deferred Exchange is one of the last tax
shelters allowed by the IRS.
Contact me by
clicking on this link to find out more about 1031 Tax Deferred Exchanges and
find out if your investment property qualify. |
Real Estate Contracts >Understanding The Contract
When you are selling a home, the most important part of the transaction occurs after you have found a buyer. If your property is being marketed professionally, the real estate agent will put together the purchase offer and present it to you.
Each local Board of Realtors has standard contract forms which reflect the legal requirements of the jurisdiction in which you live. These contracts include the sales price, financing contingencies, completion deadlines, and other items that are required in order to meet local government requirements.
You may find that trying to sell your own home in order to save the brokerage fee is false economy. Real estate sales are complicated, and a slight variation in language can sometimes cost you a sale and/or a lot of money. Many of our listings came from sellers who thought their homes were sold, only to lose the buyers at the last minute--on a technicality!
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| Q |
What is a Buyer Broker?
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| A |
A buyer broker represents buyers, helping them to find the best property and negotiate the best purchase price and terms.
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 See More Real Estate Trivia > |
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- NUMBER1EXPERT™ 
