1031 Exchange Properties in Charleston, South Carolina
Over the last several years the Charleston, South Carolina real estate market has shown strong demand for 1031 exchange exchanges. From Myrtle Beach, Pawleys Island, Mt. Pleasant, Kiawah Island to Hilton Head and Greenville, investors continue to buy and sell South Carolina real estate. The 1031 exchange has been used by these investors and business owners to defer recaptured depreciation and federal capital gains taxes when selling and reinvesting into real property.
When a nonresident is selling South Carolina real property, South Carolina Code Section 12-8-580 "requires any person who purchases real property from a nonresident Seller to withhold South Carolina income taxes from the seller." Seek counsel from your CPA to complete Forms I-290 and I-295. The tax is 5 and 7 percent of the gain determined on I-295 if the seller is a nonresident corporation or individual respectively.
Real property held for use in a business and investment also are eligible for a 1031 exchange. Rather than paying taxes, those dollars are reinvested into 1031 exchange properties providing a return on investment. In addition, the expense of borrowing those dollars is eliminated given the tax deferral represents an interest free loan for the tax otherwise paid. A 1031 exchange is not tax free, the tax obligation is always present and due when the replacement property is sold.Tax planning is important to decide when it is appropriate to pay the tax obligation or initiate another 1031 exchange.
Since 2003, the Certified Exchange Specialist on staff has provided qualified intermediary 1031 exchange services to professional advisers and their clients.1031 exchanges often include build to suit or improvements to commercial and vacation properties such as refurbishment and construction of new buildings.
A Partial List of 1031 Exchange Properties Includes:
Prudent investment standards are followed to hold the exchange proceeds in secure and liquid accounts, depositing 1031 exchange proceeds into interest bearing, non commingled accounts that require either a personal identification number or dual signatures for disbursement. Each account is insured by Federal Deposit Insurance Corporation (FDIC). For those exchanges with greater than $250,000 in exchange proceeds, a non-interest bearing qualified escrow account is used.
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