Before You Decide On A 1031 Exchange….

IRS Publication 537 defines, An installment sale as the sale of property where you receive at least one payment after the tax year of the sale.  Installment sales are commonly used to defer immediate Capital Gains Taxes when selling a capital asset. The most common tool used by selling investors to defer their tax obligation is a 1031 Exchange.

A 1031 has its benefits…but are there better structured installment sale options?

If you’re considering a 1031 Exchange, here are a few questions to consider:

  1. Do you like the idea of being pressured into identifying a replacement property and having to perform before the 45 & 180-day deadlines or get stuck paying the taxes?
  2. Put yourself in the seller’s shoes of the replacement property you must buy… once a buyer discloses their transaction as a 1031 Exchange and you know they are under the rules of Big Brother to buy or pay taxes, who has the upper hand in the transaction? Where is the buyer’s negotiating power?
  3. Would you like to be in control to determine when and if you pay taxes, while enjoying the flexibility of diversifying your portfolio – investing in high return non-real estate and/or real estate investments?
  4. The real estate market is at an all-time high with several analysts predicting a correction in the very near future. Wouldn’t it be nice to sell your capital asset now, have the proceeds from that sale working for you generating healthy returns, and scoop-up real estate deals at bargain prices when the market adjust – all done with your deferred tax dollars under IRS 453 installment sale guidelines.

A Better Solution

Learn about a better option that satisfies the objective of deferring capital gains taxes, allows flexibility and control, awards you the benefit of generating high returns inside or outside of real estate with deferred tax dollars, and supported by an issued IRS Private Letter Ruling regarding structured installment sales.

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