<h2>Nevada Desert Realty Henderson real estate terms: What is a 1031 Exchange</h2>
A 1031 Exchange happens in the process of a real estate investor selling their property and then buying another property. The tax code allows for that person to not have to pay taxes on the proceeds, or the money earned from the sale of the home IF the person follows the correct steps. This 1031 Exchange protects a property owner’s investments and oftentimes allows a person to buy a bigger investment than they would have if they were to pay taxes on the proceeds of their investment property sale.
A 1031 Exchange is not the same as a 121 Exchange. A 121 Exchange allows you to sell your personal residence and not be taxed on a certain amount of the proceeds of the sale. A 1031 Exchange is for rental property specifically. If you have lived in the rental property before, be sure to mention that to your real estate agent so they can get you the correct information or refer you to a real estate attorney so you can find out whether you should use a 1031 Exchange or 121 Exchange.
If you are planning on buying a real estate property after the sale of your current property, you should notify your real estate agent and escrow company. There are certain steps that must be taken in order to skip paying taxes on the sale of your real estate investment in Henderson or Las Vegas. You will need to make sure the proceeds from the sale of your current property go into a special account. You will also need to make sure you purchase a new or new-to-you property within a certain time frame of selling your home or you will have to pay capital gains from the sale of your property.
If you are selling a home in Henderson or Las Vegas and are interested in a 1031 Exchange, be sure to hire a Las Vegas or Henderson real estate agent who has experience in 1031 Exchange transactions. They will have experience and know-how to have your back as they are also helping you navigate through the transaction. They will help you get enough information so you can make sure that a 1031 Exchange is right for you and matches your financial goals. If you are selling a home with no intention to buy in the near future, a 1031 Exchange may not be right for you as you are restricted as far as how much time you have to purchase another home.
If you need to wait and buy yourself a little more time before you sell your investment property, Nevada Desert Realty will be able to help you! Hiring a property manager will help you pass off the responsibility of owning rental property and your manager can deal with the day-to-day challenges until you are ready to sell. You can keep your property or properties until you are ready to sell and purchase another property and continue to collect rent at the same time. This could be a great option depending on your time frame and on the Las Vegas and Henderson real estate markets.
Nevada Desert Realty has experienced agents who have helped their clients take the 1031 Exchange route when they sell their property in Henderson or Las Vegas. They also are experienced property managers and have helped clients purchase investment real estate, managed their client’s investments, and then list the property to sell as soon as the client is ready. Nevada Desert Realty’s office phone number is 702-509-1446 and they can be reached by call or text if you have any additional questions about 1031 Exchanges.
