1031 Tax Deferred Exchange | 25 of the Most Commonly Overlooked Tax Deductions

1031 Tax Deferred Exchange

Are you thinking about selling your investment property but would prefer not to pay capital gains tax?

You may wish to consider a 1031 Tax Deferred Exchange — a vehicle for deferring capital gains tax when selling investment property.
 
To determine if you need a 1031 tax deferred exchange, here is a list of questions to consider:

• Do you own and live in a multifamily that you have been thinking about selling or upgrading?
• Perhaps you own rental properties (commercial or residential) in a few different places, but would like to consolidate and buy something nearby?
• Do you own a building in which your business is located and are thinking of retiring or moving to a new location?
• Do you own a piece of undeveloped land in a location you no longer prefer?

Thanks to the Internal Revenue Code Section 1031, you have a resource to protect, grow and diversify your real estate investments. When following the specific IRS guidelines, including engaging the services of a qualified intermediary, it may be possible for you to defer capital gains indefinitely.

Here is a link to a brochure introducing you to 1031 Exchanges produced by one such qualified intermediary, Asset Preservation, Inc., that may be of interest to you:

http://www.apiexchange.com/apimain/0page/brochures.php

Along with some basic information about exchanges, it defines the initial steps to begin the process. Although Asset Preservation, Inc., is a company we have had good experience with, there are others that offer similar services. Whichever you choose, be sure they have experience doing Exchanges and that they come recommended by a reliable source.

If you are considering a Tax Deferred Exchange and need to determine the value of a property you are contemplating selling, we would be happy to meet with you. Contact us if we can be of assistance in this or any of your real estate endeavors. 

25 Of the Most Easily Overlooked Tax Deductions

As tax season begins, we all want to be sure we are not overlooking any legitimate tax deductions. Some of these are real estate related and some cover other subjects. Whatever the topic, we hope this list will open up some options you may have overlooked until now:

1. Accounting fees for tax preparation services and IRS audits
2. Amortization of premium on taxable bonds
3. Appraisal fees for charitable donations or casualty losses
4. Appreciation on property donated to a charity
5. Cleaning and laundering services when traveling
6. Commissions and closing closts on sale of property
7. Contact lenses, eyeglasses, and hearing devices
8. Depreciation of home computers
9. Employee’s moving expenses
10. Federal estate tax on income with respect to a descendant
11. Fees for a safe-deposit box to hold investments (e.g., stock certificates)
12. Improvements to your home
13. Investment advisory fees
14. Lead paint removal
15. Legal fees incurred in connection with obtaining or collecting alimony
16. Margin account interest expense
17. Mortgage prepayment penalties and late fees
18. Points on a home mortgage and certain refinancing
19. Real estate taxes associated with the purchase or sale of property
20. Seller-paid points on the purchase of a home
21. State personal property taxes on cars and boats
22. Subscriptions to professional journals
23. Worthless stock or securities
24. 50% of self-employment tax
25. Cellular telephones

1031 Tax Deferred Exchange | 25 of the Most Commonly Overlooked Tax Deductions