Defer Losses on Real Estate Sales

With a 1031 real-estate exchange, not only do you get to put every cent of the money you are paid in the sale of your property into a reinvestment in property, permitting you to keep growing your portfolio and your income, you may defer a loss that might happen from the sale of property that you purchased and held for investing reasons.

Defer Loss with 1031 Investments

When you sell a property and it results in a net loss, instinct may have you claim it on your taxes as a loss to lower your tax burden. In some cases you can defer that loss and come out better financially when all is said and done. This will not be the perfect situation each time. yet it can be of benefit in a few cases.

It’s very important to have the sale structured as a 1031 from the beginning. This isn’t something that can be retro-fitted. When you decide you’ve got a net loss, it is too late to begin the process. The anatomy of a 1031 will need you to defer both a gain and loss, so you have to be prepared for either when you begin the process.

Before the closing of the sale, you need to be aware of the tax burden it will place on you to do it as a 1031 or as a standard sale. Then you can make an informed choice, so the usage of a certified tax consultant is crucial.

A Great Reason to Defer Losses

If you are a one off financier and do not have any other net losses carrying over on your returns, then a deferment may not make much sense. If you’ve got other losses that carry forward for a certain number of years to offer you a tax break, however, adding another might mean that you will miss out on the advantages you would have had if it had been your only loss. If you can defer it, then it is possible to get the tax benefits later when other losses have fallen off your return.

You need tax counsellors and real estate pros to help when you’re buying 1031 investment property or trying to understand the consequences of tenants-in-common (TIC) property. But you should also learn as much as you can on your own. Visit 1031investmentopportunity.com today to start your investment education!