How To Choose The Right 1031 Exchange Service To Make The Process Successful
The tax code is very complicated, but the realtors who understand its niche stand to gain profit.
And, a perfect example for the same is 1031 Exchange. This is a provision of the tax code which states that a tax payer is allowed to exchange one investment property for another by deferring the tax consequence of sale. The 1031 exchange is the perfect tool to increase the cash flow by deferring taxes. If you own a real estate property and selling it for a substantial profit, then normally gain from the capital income is taxable. But section 1031 IRS code provides a way to postpone such tax if the exchange is for “like-kind” property.
This is one of the best investment strategies available to the property owners in U.S., but they need a knowledgeable and expert agent to help guide them through the whole process. 1031 exchanges are an excellent way to preserve capital and defer capital gain taxes. But no two 1031 exchanges are alike, so it is always important to work with a 1031 qualified intermediary who understands the business and can help meet the client’s requirements. The 1031 exchange specialist offers the best solutions to the clients to successfully manage the whole process.
A 5-step guide to choosing 1031 Exchange service
Now the question is how to choose the best 1031 exchange services to make the process smooth? And, the answer is:
- Determine the complexity of your 1031 exchange: Yes, there are several factors to consider that contribute to the intricacy of your transaction which may include valuation, timings and the use of property. Make sure you understand what your transaction requires before choosing the 1031 exchange services. It is also important to know what additional services your exchange requires including financial services, brokers or the escrow services.
- Does the service you are considering have a certified or trained 1031 exchange specialist?: As, we all know that 1031 exchange process is intricate and may vary from particular deal to deal. So, it is always crucial to know that your chosen service has professionals on hand to sort out anything.
- Do you need help on selling or finding the acceptable replacement?: You will always want to find the services which include 1031 exchange brokers in their resources. The 1031 exchange specialist companies in Southern California help ensure that the whole transaction is successful.
- Do you also need help in reviewing transactional and legal documents related to the exchange? You should always look for the exchange services that have a legal expertise to help you out. Reviewing of transaction is different than processing the paperwork related to 1031 exchanges. And, many services do not have the specialists to help with the review. So, this is important to choose such services wisely.
- Research about the services you are considering: It is always important to understand the services that you are considering. It is important to know about their transactional expertise, their range of services and experience in the related fields. Ask for the references as a part of your due diligence.
The rules and regulations to 1031 exchange process are complex and a single mistake may result in your exchange being disallowed and you will have to pay additional taxes. The right exchange service specialist will guide you throughout the process.
Get in touch with 1031sponsors.com, the right 1031 exchange service provider for all your 1031 Exchange needs. With our unmatched expertise, you are sure to get the best value from your 1031 exchange plans.