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Five Reasons to Exchange
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Volume #2005, Issue #2 |
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Section 1031 tax deferred Exchanges continue
to increase in popularity as more investors
nationwide discover the wide range of investment
objectives that can be easily met through
Exchanging.
PRESERVATION OF EQUITY
A properly structured Exchange provides real
estate investors with the opportunity to defer
100% of both Federal and State capital gain
taxes. This essentially equals an interest-free,
no-term loan on taxes due until the property
is sold for cash!
LEVERAGE
Many investors Exchange from a property where
they have a high equity position or one that
is "free and clear" into a much more valuable
property. A larger property produces more
cash flow and provides greater depreciation
benefits, which therefore increase the investors
return on their investment.
DIVERSIFICATION
Exchangers have a number of opportunities
for diversification through Exchanges. One
option is to diversify into another geographical
region such as Exchanging out of one apartment
building in Denver, Colorado for two additional
apartments-one in Sacramento, California and
one in Dallas, Texas. Another diversification
alternative is acquiring a different property
type such as Exchanging from several residential
units to a small retail strip center.
MANAGEMENT RELIEF
Some investors accumulate several single family
rentals over the years. The on-going maintenance
and management of what can be a far-reaching
group of properties can be lessened by Exchanging
these properties for one better suited to
on-site maintenance and management. Exchanging
into a single apartment complex with a resident
manager is a good example of this.
ESTATE PLANNING
Sometimes a number of family members inherit
one large property and disagree abut what
they want to do with it. Some want to continue
holding the investment and some desire to
sell it immediately for cash. By Exchanging
from one large property into several smaller
properties, an investor can designate that,
after their death, each heir will receive
a different property which they can either
hold or sell.
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NCS Exchange
Professionals
4811 Hopyard Rd. Suite G-6
Pleasanton, CA 94588
1-866-USE-1031
www.ncs1031.com |
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