A 1031 exchange is a tax deferral strategy approved by the Internal Revenue Service. In St. Louis, Missouri and surrounding areas, 1031 exchanges are used by the individual investor owning a rental property or a collectible, to the strip mall and shopping center owner to the Fortune 500 company who routinely replaces their fleets of cars, trucks and equipment.
Investment properties range from real estate to tangible and intangible personal property. They all share a common outcome when sold triggering federal, state if applicable and recaptured depreciation. The taxes can represent upwards of 40% of the sale. It is prudent tax strategy to determine with your CPA whether a 1031 exchange will be of benefit.
IRS 1031 deferrals represent an excellent way to defer recaptured depreciation and Federal capital gains taxes. There are many types of exchanges including forward, simultaneous, reverse, build to suit, and improvement and personal property exchanges. Each follows 1031 exchange guidelines, rules and requirements. The following real and personal property are eligible for a 1031 tax deferred exchange:
Atlas 1031 Exchange meticulously manages each exchange depositing the exchange proceeds into an interest bearing non commingled account. The account can require a personal identification number known only to the Exchangor and the bank. Another secure option is the use of a Qualified Escrow Account that requires the notarized signature of the Exchangor authorizing the disbursement.
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