Tax laws are constantly changing and most people find it hard to keep up with 1031 exchange tax law changes. Instead of searching for accurate information online, the most effective strategy is to work with investment partners or a manager that understands the industry and can offer relevant advice.
1031 Exchange Tax Law Changes
To begin with, significant tax law changes happened about 20 years ago. At the time, laws were put into place that made it possible to minimize capital gains taxes by rolling the gains into the purchase of another investment property. For years, the most common method was through real estate. Investors with commercial real estate holdings could defer taxes by moving the money into the next property as soon as possible.
This strategy started to shift with time, and people began using a 1031 exchange with anything that was deemed property by the IRS. The industry started to get murky as people were using 1031 exchanges for transactions that involved cryptocurrency and other assets. Then, 1031 exchange tax law changes were implemented to clarify that tax deferment could only be done with real estate properties.
Rules for 1031 Exchanges
Specific rules govern the transactions that can be completed with 1031 exchanges. For example, a seller has a 45-day window to identify up to three properties that qualify for the exchange. Then, a deal needs to be closed within 180 days if you don’t want to be liable to pay capital gains taxes.
Many intricacies in the transactions can pop up depending on the situation and the properties that are sold and purchased. With so much money on the line, it makes sense to utilize the services of a company that can assist with the strategy and portfolio management.
As a result, many investors are turning to opportunities for crowdfunding and commercial real estate partnerships. The right opportunity offers a way to minimize the risk of commercial investment while maximizing the divided cash flow and long-term appreciation that is available.
Don’t Stress about Tax Law Changes
There is no reason to stress when you are working with a reputable, experienced investment team. As the tax laws change over time, your managers and advisors will keep you abreast of the new rules and regulations that might impact your portfolio. Building a team of experienced industry leaders is the best strategy that can be used to improve the results of your long-term investments.
If you have questions about 1031 exchange tax law changes, then our expert team is here to assist. Call First National Realty Partners. We are working hard to offer excellent investment opportunities for people who are looking for the right properties. Whether you are considering a 1031 exchange to switch up your investments or you are looking for new opportunities, we’re here to help. Call any time for more information.