Like Kind Exchange provisions survive in the new tax law, but only for real estate investors.
One important tax deferral advantage is still available for real estate used in business. This postponement of capital gains tax is one of the best real estate investor vehicles for preserving and building real estate wealth. This provision of the Internal Revenue Code allows property owners to exchange their property for other like-kind property without recognition of capital gains. It makes it possible to transfer the financial gain that is realized from the sale of a property into another property without federal capital gains tax at the time of the sale.
Saving those taxes can be a vital opportunity to parlay profits for further profits. Simply trading one real property for another real property doesn’t automatically constitute a like-kind exchange. Executing an improper exchange may result in substantial tax liabilities and potential legal action from investors. The provisions to utilize a middleman remain intact. Sad to remind you that a personal residence doesn’t qualify for this tax deferral.
Whether you are a business, individual, or non-profit – feel free to reach out to us with any follow-up questions. With one call or email we will provide you with professional, complimentary advice – no obligation. Just contact us at firstname.lastname@example.org, or call (212) 397-2970 and we will be happy to help you and answer your questions.