San Diego Commercial Real Estate

Check the San Diego Area for commercial properties. Contact a San Diego commercial real estate who can guide you toward more profits taking advantage of the 1031 exchange.

The 1031 Exchange code gets its name from the Internal Revenue Code Section # 1.103) is a code that can end up saving individuals money on certain business and investment property transactions. Taxes must be paid on real estate and personal property if any profits were made. However there might be an exception.

The 1031 Exchange allows sellers of some real estate and personal property to be exempt from paying the ‘capital gains’ and ‘profit’ taxes if they are “exchanging” the property they sell, for a new property of “like-kind”. This code applies to business property and investment property.

An example would be selling a property which had been used as an office, and then buying a similar property to be used for the same purpose.The profits will not be taxed. The new piece of property does not have to be the same size or type, as long as it is going to be used for the same purpose as the one sold.Similarly, a property can be purchased for investment purposes can be sold to buy a different property for investment purposes, without taxing the profit. The broad definition of exchanging for a “like-kind” property allows for a great deal of flexibility.

At times, there are some time factors to be considered. The purchase of the new property must take place within 180 days of the sale of the original property.It is more financially efficient to make the sale and purchase as close in time as possible. The 1031 law does require that a qualified intermediary be used after 45 days of the sale to ensure that the gains are used towards the purchase of the new property. This prevents many individuals from using the profit for their financial gain.

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