Considering a 1031 Exchange?
California property owners can pay up to 42.1% in taxes on the sale of their investment property because of capital gain and depreciation recapture. With a 1031 Exchange, you can defer, reduce, and even eliminate paying taxes.
A 1031 Exchange allows real estate investors to defer capital gains tax on recently sold investment property by reinvesting the proceeds into like-kind property of equal or greater value. The transaction gets its name from Section 1031 of the U.S. Internal Revenue Code.
If you own investment property and would like to discuss your tax-deferred 1031 Exchange options, contact us to schedule a complimentary consultation.
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10 Trends Impacting 1031 Exchanges in 2021
Unexpected events and economic changes impact real estate investors every year, but 2020 stands out like no other. The global pandemic abruptly and dramatically disrupted multifamily housing, office, retail, and hospitality sectors of the industry. Inevitably, savvy investors shifted focus and strategy as long-term tenant trends and investment opportunities started to emerge.
Location and asset class are always key factors in any real estate transaction, and they will play an even bigger role in 2021. Before selecting replacement property consider these 10 trends impacting your 1031 replacement property selectionin the new year.
- Renters Move Away from Dense Urban Areas
One of the more notable changes in renter trends is the flight away from dense, urban, gateway cities such as San Francisco, Los Angeles, and New York. Due in large part to the pressure felt from COVID-19 and social unrest, dense urban centers lost their appeal as desirable amenities such as bars, restaurants, entertainment, and public transit were no longer available.