7. 1031 Exchange in Comstock Park MI… What is it?

we buy properties in Comstock Park MI

We buy houses in Comstock Park Michigan. Are you planning to sell your house in Comstock Park? Ever heard of a 1031 Exchange? We are homebuyer in Michigan and we can help you to better understand this strategy. So check this out!

1031 Exchange in Comstock Park MI… What is it?

Taking advantage of a 1031 Exchange is a great way to re-invest and build wealth. The time has come for you to sell your rental property, but you are dreading the amount of taxes you will be required to pay on the capital gains after the sale.  Uncle Sam always wants a piece, but what if you could defer these taxes?  What if you could cut ties on your investment property with a problem tenant and re-invest into another property that cash flows better without paying capital gains taxes.  With a 1031 exchange, you can!

Uncle Sam pointing at you 1031 exchange
1031 Exchange can be an excellent strategy to defer capital gains taxes on real estate investments

A 1031 exchange is another name for section 1031 of the IRS Code that basically says a taxpayer may be able to defer capital gains tax if you sell a rental property and re-invest the gains into another property.  If you are trying to increase your rental portfolio and buy properties that have greater cash-flow returns, a 1031 exchange could be a great strategy to accomplish this faster.

Example, let’s say purchase a rental property for $100,000 and 5 years later it’s worth $200,000.  You sell the property but instead of paying $30-35k in capital gains taxes on the appreciated value of $100,000, you defer these taxes by reinvesting into a new property.  You pay no taxes on the gain and are able to use all your money for a better cash-flowing property.  There is no limit on how many times you can do a 1031 exchange.  This can be a great way to build wealth quickly!

Of course, there are rules.

1031 Exchange Rules:

  • You must own the property
  • You can only do this exchange with investment properties, not personal property
  • Both properties must be similar enough to qualify and be “Like-Kind”
  • The new property must have greater value than the old property, otherwise additional tax considerations may be assessed
  • You must re-invest 100% of the gains into the new property

As with any section of IRS Code it is important to talk to your accountant about your options and whether or not you would qualify for a 1031 exchange.  But this can be a great strategy and one of the many reasons why landlords cash out on their rental properties.

Sell My House In Comstock Park MI

If those tips have been helpful then we urge you to sell your property directly to us at, Lakeshore Home Buyer. There isn’t any marketing to worry about, nor will you have to do anything to prepare the property for a sale. Avoid the hassle and no need to hire an agent. We offer cash for houses in Comstock Park MI and we will make the process simple so you can quickly sell your house in MI and move on.

Are you ready to sell your home in Comstock Park MI? We are ready to help you with a solution! Send us an email or give our office a call today! Lakeshore Home Buyer, Fast and In Cash! We can’t wait to talk to you! (616) 202-6498

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