Pamela Swancutt,
Realtor (S)
Ferrari Pacific Realty Corp.
75-6082 Alii Drive, Suite A
Kailua-Kona, Hawaii 96740
(808) 557-4224 Direct
(808) 327-3163 Office
(808) 327-3164 Fax
Toll Free
(888) 828-5662
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Thanks to IRC §1031, a properly structured exchange allows an investor to sell a property, to reinvest the proceeds in a new property and to defer all capital gain taxes.
A 1031 exchange is simply a method by which a real property owner disposes of one property and acquires another without having to pay any capital gains tax on the transaction. In an ordinary sale transaction, the property owner is taxed on any gain realized by the sale.
Exchanges protect investors from capital gain taxes as well as facilitating significant portfolio growth and increased return on investment. In order to access the full potential of these benefits, it is crucial to have a comprehensive knowledge of the exchange process and the IRC. For instance, an accurate understanding of the key term "like-kind" - often mistakenly thought to mean the same exact types of property - can reveal possibilities that might have been dismissed or overlooked.
I am pleased to provide my clients with educational reports on IRC Section 1031 Tax Deferred Real and Personal Property Exchanges upon your request. 1031 exchanges are authorized by Section 1031 of the Internal Revenue Code. Careful adherence to the requirements of Section 1031 is important in maintaining the tax-free status of the transaction. Before starting an exchange you should seek a qualified tax or legal adviser.
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