Why you should not ignore the possibility to apply for 1031 exchanges
Sometimes, you need to make important changes for your business and it can be very difficult to decide what is better for you. If you feel that changing your business location is what you need, it means that you are going to make a great choice. Taxes can be very high and you don’t want to pay so much money because you are interested in rising your profit. It is very important to have the courage to try new things and to assume them, otherwise, you will have so many problems. But don’t worry because everything can be solved if you have patience. You need to be positive and to struggle if you want to make your dreams come true. Changing the location of your business can be very stressful, but if you are very careful, you will manage to do that very soon. It is very possible that you don’t know what is 1031 exchange or if you know, maybe you don’t have the details.
What you should know first
The most important thing that you should know about 1031 exchange is that you can forget about huge taxes because you have the possibility to find someone that wants to make a swap with you. It is significant to find a “like-kind” property because this is the main rule that you have to respect. Both investment properties have to be similar, meaning that they need to have the same value and to function in the same domain. The reason is so evident considering the fact that the new building has to offer you the same features as the other one. However, it is not necessary that the buildings have the same quality. Everything depends on your needs and wishes.
You need a qualified intermediary
It is now allowed to receive money from the other person because it is an exchange not a sell and if there are some little differences, a third party should know what to do. That qualified intermediary will be informed about everything that is happening with your properties. You should tell him what you want to do, and if you found something that you like. Make sure that it is a qualified person and that is not one of your relatives because everything has to be well done. The intermediary will purchase the property in your behalf, acting like you would buy it, but don’t worry because this is something normal and everything is completely legal.
Timelines are very important
You have to know that you have a fixed timeline to purchase a building. You have only 45 days to find one or more properties that are similar to yours. This identification has to be written and the property has to be described exactly. After you managed to do that, you have 180 calendar days to acquire the property that you have identified in 45 days. You can see that things seem to be a little bit difficult but if you hire some specialists, they will guide you very careful in order to obtain what you want without being stressed.