Strategic Exchange Advisors
Toll Free: +1.888.800.1031
Office: +1.678.805.4492
www.sea1031.com
BBB Online Reliability Program
The Pinnacle Building
3455 Peachtree Street, NE
Suite 500
Atlanta, GA 30326
Strategic 1031 Exchange Advisors, Atlanta, Georgia

1031 Benefits

The benefits awaiting the taxpayer who successfully executes a 1031 Exchange transaction are numerous. The list of these taxpayer benefits include, but are certainly not limited to:

  • Tax Deferral (Immediate and Indefinite)
    In a properly executed 1031 Exchange, the capital gain taxes are deferred and transferred to the Replacement Property. Tax is not due until the taxpayer sells the Replacement Property without utilizing a 1031 Exchange. Since there is no limit to the number of exchanges a taxpayer can complete, it is possible to defer the payment of tax indefinitely.
  • Improvement of Returns on Investment
    A taxpayer may wish to sell an underperforming asset and acquire an asset that offers a more attractive cash flow or appreciation potential. Additionally, a taxpayer may wish to trade a non-income producing asset, such as raw land, for an asset that produces positive cash-flow, such as a retail shopping center. A properly executed 1031 Exchange will allow the taxpayer to achieve such an objective.
  • Consolidation or Diversification
    Taxpayers may accumulate multiple property holdings and eventually determine the need to consolidate these holdings into a few larger assets. Conversely, taxpayers may own only one substantial property, and desire to diversify their holdings across several different properties. A comprehensive exchange strategy can help taxpayers achieve these objectives.
  • Elimination of Management Hassles
    Many taxpayers own investment property that is management-intensive. These taxpayers may want to defer tax when selling their Relinquished Property, but do not want to acquire Replacement Property that requires substantial management commitment. Potential solutions for this dilemma include the purchase of Triple Net Lease (NNN) property or Tenant-in-Common (TIC) interests, in which the maintenance and repairs are not the responsibility of the taxpayer.
  • Wealth Building
    Potentially, the greatest benefit that comes from utilizing 1031 Exchanges is the ability of the taxpayer to preserve all of the equity in the Relinquished Property. The compounding effect of earning a continual return on all of the equity, instead of a portion of the equity, can result in a higher overall yield for the taxpayer. This preservation of equity via exchanging is a powerful wealth building tool.