It’s April: Time to Explore Potential Tax Savings
Written By: Max S. Case | Published: April 9, 2015
Even though our weather hasn’t changed, the calendar shows that it is April. April brings the NCAA Tournament, the start of the baseball season and the start of the Stanley Cup playoffs. April 15th is also the date taxes are due.
Taxes can include capital gains generated by the sale of real property. Looking for a way to limit your exposure – think about entering into a tax free exchange permitted under Section 1031 of the Internal Revenue Code. Recently, we helped clients through this exchange process enabling them to avoid significant capital gains.
The tax free exchange is particularly attractive to property owners whose property has substantially increased in value and who are facing the payment of substantial capital gains.
The tax free exchange process involves the cooperation of the Seller and Purchaser and the use of a third party exchange company. Section 1031 provides a seller with 45 days after the date of closing to identify possible exchange properties and an additional 135 days to close on a property.