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What is a Real Estate Tax Free Exchange?...
There are various reasons why one would do a tax-deferred exchange. The following are a few examples: You may have some non-income producing real estate investments, such as raw land, which are not giving you cash flow. You could exchange this for property that is income producing, such as a duplex or a rental home. Not only could you start realizing a cash flow, but you can also get income tax deductions such as depreciation, which you did not have with your raw land. One would be foolish not to do a tax-deferred exchange! If you sell and reinvest, you will pay income taxes on the realized gain. However, if you call it an exchange, you will pay no taxes. This means that more money is available as leverage for acquiring your next property or dream home in Cambria or other beautiful communities. Look at it as a free loan from the government! With proper estate planning you can keep exchanging properties throughout your lifetime. Neither you nor your heirs will ever pay income taxes on the gains. By doing a tax-deferred exchange, you can conserve your equity by not having to pay taxes on your net profits. Please remember my uncle Drake for additional tax advice.
Drake A. Williams
Financial Economist/CPA - 915 760-5357
Thank you for visiting www.cambriacentralcoast.com, your one stop website real estate and community information center. Kellie Williams is a lifetime resident of San Luis Obispo County. Serving hundreds of families just like yours!
Kellie Williams 805-927-2269