If you plan to sell or purchase a property and explore ways to defer taxes, you probably would have heard about the 1031 exchange. As you may know, this is derived from Section 1031 from the IRS that lists that if you exchange your property for a “like-kind property”, you may be able to defer taxes. However, you should note that you only complete this transaction when you fulfil all the requirements listed by the IRS. So, if you are planning to search 1031 exchange properties in Salt Lake City, you should see if it’s worth the effort or not.
Here are some of the reasons why you should prefer to seek a plan that comes with 1031 exchange:
- It defers capital gain taxes
One of the first reasons you should go for the 1031 exchange is that it helps you defer capital gain taxes. You can only do that when you meet all the IRS requirements. Some of the things you should do are to find a neutral third party, find a like-kind property, lock-in at least 2-3 potential like-kind property options, and complete the transaction within the specified time frame. Apart from this, you should also see if the type of property you are purchasing is suitable for the 1031 exchange.
- It helps you find like-kind properties
Another reason you should opt for the 1031 exchange as it helps you find like-kind properties. Even though it might not seem significant at first glance, it may provide many advantages when you gather more information about this. As you will be able to close the deal by following one procedure (1031 exchange) rather than conducting two separate procedures (purchasing and selling), it is a great alternative for you.
- It’s a powerful estate planning tool
For the unaware, 1031 exchange can function as a great estate planning tool. Rather than getting into the complexities of buying a property and then following complex procedures to pass them on to your loved ones, the 1031 exchange enables you to opt for a simple route. All you need to do is select one of the best 1031 exchange properties in Salt Lake City, and you can proceed further. If it is completed successfully, your loved ones will inherit your property tax-free.
- It helps in preserving wealth
Lastly, you should prefer to opt for the 1031 exchange program to preserve your wealth. When you save money that you may have otherwise spent, you build wealth for your future. The only thing you need to be concerned about is that you are eligible for this exchange, and you adhere to the IRS guidelines. After you do that, you do not have to worry about anything else and focus on other details.
If you wish to know more about the 1031 exchange properties in Salt Lake City, you should contact the concerned agencies.