The like-kind exchange is a valuable tool used by many investors to defer capital gains taxes on the sale of property. Contact us today if you have questions about your Fargo 1031 exchange. Our qualified intermediaries assist taxpayers in Fargo, and across the country with like-kind exchanges of real property. We are available now to walk you through your 1031 exchange - 877.373.1031.
Fargo 1031 Real Estate Exchange
A 1031 like-kind exchange is a way of deferring your capital gains taxes when you sell real property. The catch is that you have to move those sales proceeds into a new investment. The idea behind Section 1031 of the Internal Revenue Code is to encourage investment and stimulate the economy.
Consider the following Fargo 1031 exchange example. Say you own a motel in Fargo. If you sell that property you are going to have to pay a hefty capital gains tax bill. A 1031 exchange would allow you to defer those capital gains taxes. All you have to do is roll the net proceeds from the sale of that Fargo motel into another like-kind property (say, an apartment complex in Bismarck). If you do this, and satisfy all the 1031 exchange requirements, you can avoid a large tax burden and keep your money compounding and building in that continued investment.
1031 Exchange Rules
There are, of course, a number of rules and regulations you have to follow for your exchange to be valid:
- Time Requirement. You have 180 days in total to complete your exchange after selling your relinquished property (the first 45 days are for identifying your replacement property).
- Like-Kind Requirement. Both your relinquished property and your replacement property need to be like-kind.
- Debt, Value, Equity Requirement. You also need to go up in your debt, value, and equity on your new replacement property.
Like-Kind Exchanges in Fargo, ND
In any 1031 exchange, it's important to put together your team of trusted advisers. First and foremost, you should talk with a qualified intermediary who specializes in facilitating like-kind exchanges. 1031 exchanges are complex matters. Talk with our 1031 exchange third-party administrators today about your Fargo 1031 exchange - 877.373.1031.