San Diego commercial brokers

For commercial properties, there is no better place than in the San Diego Area. Contact a San Diego commercial brokers who can guide you toward more profits taking advantage of the 1031 exchange.

The 1031 Exchange, (the name comes from the Internal Revenue Code Section # 1.103) is a code that can end up saving individuals money on certain business and investment property transactions. ‘Profit or Capital Gain’ taxes must be paid on personal property and real estate if any profits were made. There could be an exception, however.

The 1031 Exchange allows sellers of personal property and some real estate to be exempt from paying the ‘capital gains’ taxes if they are “exchanging” the property they sell, for a new property of “like-kind”. This code applies to business property and investment property.

An example would be selling a property which had been used as an warehouse, and then buying a similar property to be used for the same purpose.If there are any profits, they may or may not be taxed. It isn’t necessary that the new property doesn’t have to be the same size or type, as long as it is going to be used for the same purpose as the one sold.Similarly, a property which is purchased for investment purposes can be sold to buy a different property for investment purposes, without taxing the profit. The broad definition of exchanging for a “like-kind” property allows for some flexibility.

There are many time factors to be considered. Buy the new property within 180 calendar days of the sale of the original property.It is more financially efficient to make the sale and purchase as close in time as possible. The 1031 code requires a qualified intermediary after 45 days of the sale to be sure that the gains are used towards the purchase of the new property. This prevents individuals from using the profit for their financial gain.