1031 Exchange – Tax Deferred Exchange – Asset Preservation
A 1031 exchange, also known as a 1031 tax deferred exchange is a strategy and method for selling a commercial property, that’s qualified (like-kind), and then proceeding with an acquisition of another property (also qualified) within a specific time frame. The logistics and process of selling a commercial property and then buying another 1031 replacement property are practically identical to any standardized sale and buying situation. However, a “1031 exchange” is unique because the entire transaction is treated as an exchange and not just as a simple sale.
It is this difference between “exchanging” and not simply buying and selling which, in the end, allows the taxpayer(s) to qualify for a deferred gain treatment. So to say it in simple terms, sales are taxable with the IRS and 1031 exchanges are not. The 1031 Exchange works great for example if you are selling a McDonald’s, Arby’s or Walgreen’s and you trade up to 2-3 Burger Kings, Walgreen’s, Lowes Property or a Walmart site. A 1031 Exchange allows NNN commercial real estate investors to trade up, diversify, leverage or relocate their investments. The NNN commercial real estate investor is not penalized by having to pay capital gains until they sell that replacement property, almost like a loan from the government.
Look at: US CODE: Title 26, §1031. Exchange of Property Held for Productive Use or Investment
Most NNN Commercial Real Estate Investors look at the 1031 exchange process as an option, as they consider their investment agenda. They figure that they defer paying state and federal capital gains taxes and depreciation recapture until they die and their estate goes to their spouse, charity or their children. They may also be able to hold off the alternative minimum tax that might sneak up on them if they were to sell a Commercial Property. Your NNN commercial real estate deal can only qualify for a 1031 exchange if it follows the 1031 exchange rule laid down in the US tax code and the treasury regulations.
CONTACT Net Lease Properties for Acquisitions and Dispositions.
We recommend NNN Commercial Real Estate Investors use financing specialists from Loanrise.com for CTL Financing and Commercial Loans.
Net Lease Properties
7-Eleven
Advance Auto Parts
Affordable Dentures
ALDI
Applebee’s
Arby’s
Aaron Rents
Ashley Furniture
AutoZone
Bank of America
BankUnited
BB&T Bank
Best Buy
Bojangles’
Burger King
Chase Bank
Chick-fil-A
Chipotle
Circle K
CVS
Dairy Queen
DaVita Dialysis
Dollar General
Dollar Tree
Dunkin’ Donuts
Family Dollar
FedEx
Fred’s Super Dollar
Fresenius Medical Care
Hobby Lobby
IHOP
Kohl’s
Mattress Firm
McDonald’s
Napa Auto Parts
O’Reilly Auto Parts
Pep Boys Auto
Pizza Hut
PNC Bank
Rite Aid
Sheetz
Shell Oil
Sherwin-Williams
Starbucks
SunTrust
Taco Bell
TD Bank
Tractor Supply Co.
Verizon
Walgreens
Walmart
Wawa
Wendy’s
