1031-Exchange Services

Texas Realty Partners, LLC offers an array of 1031 Exchange services for clients including identification of “like-kind” properties and transfer into a new real estate property to facilitate an exchange.

A 1031 Exchange refers the IRS code that provides a mechanism for investors to defer capital gains through the purchase of a new property following the sale of an existing property.  By delaying capital gains taxes upon the sale of the initial  property  known as the “first-leg” of a transaction,  an investor can continually increase the size of their real estate assets without losing capital through taxes on the sale of each subsequent property transfer.   Over time the power of compounding and transferring into higher quality assets can lead to larger returns over time.  Eventually when initial capital is removed from real estate assets, capital gains will be due on the transaction.

Transferring into a replacement property within 180 days is known as a deferred exchange, and these transactions have to be mutually dependent to each other.  Prior to the replacement property disposition, a 1031 Election and notification is required.   Within 180 days a “like-kind” replacement property needs to be identified and purchased.  Most investment type properties in real estate are considered to be like-kind; however, residential real estate homestead are not considered like-kind.

Please let Texas Realty Partners, LLC know if you need additional consultation or need assistance in identifying properties suitable for a 1031 Exchange.

More information from the Internal Revenue Service maybe found on their website at – https://www.irs.gov/uac/like-kind-exchanges-under-irc-code-section-1031.