Real Estate Tips

Written by Linda Alexander
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Investors trading real estate tips frequently talk about one in particular: the 1031, or Starker, exchange. This is where you "trade up" your investment property in exchange for something worth more, and defer capital gains taxes. It sounds complicated and there are specific regulations surrounding it, but it is usually a smooth transaction.

Locating Real Estate Tips

If you are looking for real estate tips and want to learn more about 1031 exchanges, you should talk to your real estate agent, lawyer, or CPA about the intricacies of the tax code. Your property might qualify for an exchange, but you must also adhere to a tight timeframe or else the deal will be off. For example, when you close on the original property, you must identify potential replacement properties within 45 days; you can specify up to three, or more if their values do not exceed 200 percent of the fair market value of the relinquished property.

Here are more real estate tips. You can violate the three property rule if you acquire the property within 45 days. You can also violate it if you have acquired 95 percent of the combined fair market value of the replacement property within 45 days. This is why you need a professional to handle the transactions.

There are lots of other types of 1031 exchanges too. Oil fields, art collections, aircraft, vehicles, and business equipment can also be traded. The rules for this type of property are more stringent than those for real estate, so if you have any questions, consult an expert.

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