Exploring 1031 Exchanges
With Steve Rothberg
In 1991, real estate attorney, Steve Rothberg, began working in the tax deferred exchange industry. Today Rothberg, a 1031 exchange expert, runs Capital 1031 Exchange Company, LLC, a Delaware Valley leader in implementing tax exchanges. Rothberg sat down with ScreenDreamer to discuss the industry.
It's important to realize that not all properties are eligible for 1031 exchanges. If you're looking to sell your residence, you'll have to stick to traditional methods of buying and selling real estate. If you're looking to swap a business or investment property, however, a 1031 exchange may be the right choice for you. Depending on the state in which the property resides, "They will get a deferral on their capital gains, federally, on their depreciation recapture tax, federally, and on state capital gains tax. In New Jersey , the savings by deferring will be in excess of 24% of your gain," says Rothberg.
Properly handling a 1031 exchange is no easy feat. The Internet has opened the door for many online companies to do exchanges over the web and advertise very low pricing. Sometimes, they make it seem like they do not get a fee at all. Although a web exchange may seem like a quick fix, there is no way to guarantee that your exchange will be done by a professional. Contacting a traditional company such as Capital 1031 is still the best way to go, if you want a professional and personal attention to your exchange.
It is important for REALTORS® to network with 1031 exchange professionals. When a REALTOR® has a client who needs to sell an investment property, putting them in touch with a deferment specialist who deals with exchanges every day can help to speed up the process, which must take place before the closing.
1031 exchanges and other deferments are very beneficial for tax payers when done for the right properties, under the right circumstances, by the right people. If you would like to learn more about 1031 exchanges, Capital 1031 offers frequent seminars for real estate and mortgage offices.
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