Whenever you sell business or investment property and you have a gain, you generally have to pay tax on the gain at the time of sale. IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free.

With values increasing so quickly one of the challenges to selling an investment property in Redondo Beach is the capital gains tax that a seller is required to pay after the sale.  Unlike selling your primary residence with a $250,000 capital gains exemption (or $500,000 for married couple) there is no exemption when selling an investment property.  One solution may be to “defer” these taxes with a 1031 exhange.

In a 1031 exchange you can reinvest all of the proceeds from the sale of an investment property and defer paying the taxes which kees 100% of the capital working.

If you choose to go down in value or choose to pull some equity out, an exchange is still possible but you will have tax exposure on the reduction. The value and equity numbers are net after paying “normal transactional costs.

See the Rules of a 1031 Exchange

See an overview of a 1031 Exchange

See the 1031 Exchange timeline

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Vista Sotheby's International

Vista Sotheby’s International Realty is one of the top real estate brokerages in the South Bay and Southern California with offices in Redondo Beach and throughout the South Bay

ADDRESS:

1801 S Catalina Ave, Redondo Beach, CA 90277

Phone:

310.251.2344

E-mail:

keith.kyle@vistasir.com

CONTACT AGENT

DRE#01712785

keith kyle

Top Producing Realtor

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Sotheby's International

Welcome to Sotheby's International Realty representing buyers and sellers of fine South Bay and Southern California properties

Redondo Beach Real Estate & Homes. All rights reserved. Information deemed reliable but not guaranteed

Keith Kyle – Licensed Realtor – Vista Sothebys International Realty – DRE#01712785

The listing information set forth on this site is based upon information which we consider reliable, but because it has been supplied by third parties to our franchisees (who in turn supplied it to us), we cannot represent that it is accurate or complete, and it should not be relied upon as such. The offerings are subject to errors, omissions, changes, including price, or withdrawal without notice. All dimensions are approximate and have not been verified by the selling party and cannot be verified by Sotheby’s International Realty Affiliates LLC. It is recommended that you hire a professional in the business of determining dimensions, such as an appraiser, architect or civil engineer, to determine such information. Sotheby’s International Realty ® and the Sotheby’s International Realty Logo are service marks licensed to Sotheby’s International Realty Affiliates LLC and used with permission.