Strategic 1031 Exchange Advisors
       Raising the Bar in 1031 Exchange
1.888.800.1031
 

1031 Exchanges for the International Investor

Since the early 1990’s, there has been a substantial increase in cross-border real estate investing around the globe. This includes a greater number of US taxpayers investing in foreign property, as well as an ever growing number of foreign taxpayers investing in US real estate. As a result of our principals having vast experience with international taxation, real estate taxation, real estate investing, and real estate development, Strategic 1031 Exchange Advisors (“SEA 1031”) is a unique resource for all taxpayers looking to perform international real estate investing and exchange
planning.

Based on the auspices of Sections 871 and 897 of the Internal Revenue Code (“IRC”), foreign investors should be aware that the sale of US real property will sweep the foreign investor into the US tax net. Therefore, foreign investors will be subject to US capital gain tax when selling or disposing of US investment real estate, or real estate used in a trade or business in the US. It is for this reason that foreign investors who acquire US real property should be cognizant of the benefits of a tax-deferred exchange, especially if they intend to acquire more real property within the US subsequent to any such sale. Setting the appropriate tax structure in place before investing in the US can promote an efficient tax rate and ultimately bolster investment returns.

The Numerous Benefits of the Tax-Deferred Exchange

When buying and selling real estate, the taxpayer can obtain many benefits from implementing an exchange strategy.

These benefits include, but are not limited to:

    •     Immediate Deferral of Tax
    •     Improvement of Returns on Investment
    •     Consolidation or Diversification of Real Estate Holdings   
    •     Wealth Building Potential

Understanding FIRPTA

Foreign investors who are party to an exchange should be cognizant of the Foreign Investment in Real Property Tax Act (“FIRPTA”) withholding rules adopted in 1980.  In general, a foreign person is a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, or foreign estate, but not a resident alien individual.  Dispositions by domestic partnerships, trusts or estates to foreign persons who are partners or beneficiaries of such partnerships, trusts or estates are also subject to special withholding rules under Section 1445(e) of the Internal Revenue Code.

 
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SEA 1031

Global Headquarters:

The Pinnacle Building

Fifth Floor

3455 Peachtree Street, NE

Atlanta, GA 30326

Toll Free: +1.888.800.1031

Main: +1.678.805.4492

Fax: +1.678.302.4428

www.sea1031.com

info@sea1031.com