If you are selling investment property and intend to reinvest the proceeds in similar, or like-kind, investment property, you should never have to pay income taxes on the sale of property. A 1031 Exchange can help you defer the taxes on the transaction.
What is a "1031 exchange?"
When a person sells an investment property, he or she would normally pay capital gains tax on the sale. However, prior to selling a property, an owner can set up a "1031 exchange." As long as a like-kind property of equal or higher value is purchased with the sale proceeds, a seller may defer paying capital gains tax. FirstBank 1031 Corporation has extensive knowledge and experience to process your successful exchange transaction.
What does FirstBank 1031 Corporation do?
The IRS 1031 regulation requires that a Qualified Intermediary hold the proceeds of an exchange sale. Since the seller cannot take possession of the sale proceeds, FirstBank 1031 Corporation steps in for the seller and holds the funds until replacement property can be located and purchased.
Sometimes a seller finds a property they want to buy as a replacement before they sell their investment property. FirstBank 1031 Corporation can take title to the property until the seller is able to sell their property. This "reverse" approach works well if more time and flexibility is needed. FirstBank can provide temporary and permanent financing to facilitate 1031 exchange requirements using this exchange method.
A 1031 exchange can be a complicated transaction and may require expert guidance. FirstBank 1031 Corporation has Certified Exchange Specialists and CPAs on staff that can consult with customers to ensure a successful exchange process.