Now is the perfect time to sell your higher priced investment property for a cash flowing investment on the OBX. Our savvy fall investors know that the inventory on vacation homes moves on an upswing in the fall after the rental season concludes. This is the ideal time to pick up a bargain and enjoy the beautiful off season weather.
How it works
Every time money moves taxes are incurred. One way to defer your taxable income is to use a 1031 exchange. Step one is to identify the sale of your property as being part of a 1031 exchange and find an intermediary to handle the sale. The job of the intermediary is to restrict the taxpayer seller from touching the money and assures that everyone is paid. The balance of the funds is held in escrow until it is wired for the closing of the second property or properties. The second property can be located in any state in the nation but must be a like-kind property, a business or investment property and not a primary residence.
The government has a strict timeline that must be adhered to qualify for the 1031 exchange tax deference. The clock starts as soon as the relinquished first property has closed. The seller has 45 days in which to identify a new investment property or properties and 135 additional days to complete the purchase. This is a total of 180 calendar days from the first closing.
The new purchase investment must be equal to or greater than the net sale price of the first sold property. The net sale price is equal to the contract selling price of the home minus the closing costs but before debt relief. You must use all of the proceeds from the first sale toward the second sale.
You can identify up to three properties within the 45 day timeframe and you may purchase one or all of them. Remember the total value of the purchase must be equal to or greater than the original net sale to qualify. If you choose to identify 4 or more properties, there is a restriction limiting you to total dollar market value of all the properties identified. This total cannot exceed 200% of the value of the relinquished property ( 200% rule).
Your financial advisor, tax accountant or attorney can answer any technical questions regarding a 1031 exchange. This summary is simply an overview of the process.
Feel free to contact us for great ROI homes on the Outer Banks ! Kelly.BuytheBeachOBX.com 855-4OBX NOW ( 855-462-9669)
Author:Kelly Dean Phone: 252-207-3655 Dated: August 28th 2018 Views: 560 About Kelly: Recently featured on HGTV's Beachfront Bargain Hunt episode on Kill Devil Hills and Nags Head! My f...
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Recently featured on HGTV's Beachfront Bargain Hunt episode on Kill Devil Hills and Nags Head! My firm, Buy the Beach OBX covers the entire Outer Banks and coastal Albemarle areas. Whether you are a first time buyer, seller, investor or looking for a home for your retirement we can assist you in your home search or market your home. As part of an investment team, I have developed, designed and managed some of the largest revenue producing properties on the oceanfront of the Outer Banks. Our projects ranged from 8 - 12 bedroom luxury oceanfront homes to a spectacular oceanfront condominium complex featuring town homes and flats and the largest saline pool on the Outer Banks - the Croatan Surf Club. My background includes a Marketing degree from the Pennsylvania State University and a Paralegal designation in Corporate Law. I hold the RSPS and GRI designation in Real Estate. I'm a member of the Outer Banks Association of Realtors and an owner of Buy the Beach Realty, LLC.
For more information about buying or relocating to the beautiful Outer Banks please feel free to call!
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"We would not have moved into our dream home without Kelly. She is a delight to work with and handled everything. I would work with her again if I ever needed to buy or sell my home
Overall rating 5/5
Market expertise 5/5
Negotiation skills 5/5
Professionalism & Communication 5/5"