While the economy is growing strong and properties are being appreciated and various other developments taking place, using the 1031 exchange has benefited investors with a tremendous boost in purchasing power. Traditional Abstract LLC, a regional source for title search, title insurance, escrow service, 1031 exchange, and various other real estate transaction services, has been offering our services to the people of Easton, PA, Allentown, Lehigh Valley, Bethlehem, PA, and Nazareth, PA. for over 3 decades now. Our team of professional are highly knowledgeable and dedicated to providing your fast, reliable, and secure service all the while ensuring that the interest of both the buyer and sellers are protected.
Below we have mentioned 3 well-known benefits of utilizing a 1031 exchange. Take a look.
- Tax benefits
The primary benefit of this rule is getting the advantage of tax deferral. Instead of selling the old property and buying a new one, the 1031 exchange helps you to defer capital gain tax which eventually keeps the money with you rather than losing a hefty amount to the taxes.
- Trade up for higher-value properties
Due to the availability of this exchange one can trade up to properties giving higher returns or to a portfolio of properties that have superior investing goals, where there’s no need to pay taxes on a new purchase unless you sell.
- Ability to reset your depreciation
Another big advantage of this exchange is that one can reduce the amount of taxes you generally pay due to the set-off of the system with depreciation. As we write off depreciation due to the wear and tear of property over the years, we get compensation from the original value of the building which gets deducted from the taxable income.
So, if you are interested to know more about the 1031 exchange, you can talk to our experts at Traditional Abstract LLC.