1031 Exchange – Learn How to Sell Your Las Vegas Rentals Without Taking a Tax Hit
By Utopia Property Management
Are you planning on selling your Las Vegas Rentals but are concerned about taking a tax hit? Thankfully, you can sell your rental properties without taking a tax hit by using a 1031 Exchange.
What Is A 1031 Exchange?
A 1031 Exchange gives you the ability to sell your rental/s in Las Vegas and buy similar assets while deferring the capital gains which you would normally pay after the transaction is complete.
Yes, a 1031 Exchange is a great way to defer paying taxes, but the truth is that in order to use one you have to purchase a property which can be defined as “like kind”, meaning a replacement property that’s equal to the same value as the one that you are currently selling.
Tips for the 1031 Exchange Process
Closing Costs – When doing a 1031 Exchange, you must be careful about how you pay closing costs because you can’t use the proceeds from the closing of property #1 to pay for property #2.
Verify Who Is on The Title – Your name must be on the title because most mortgage lenders will not make loans to LLC’s, a partnership, or a revocable trust.
Don’t Misrepresent the Status of The Property – Although you may be tempted to pass off the property as your primary residence, you shouldn’t misrepresent the property status, because this could hurt your ability to get your loan funded.
Follow The 180 Day Deadline – During the process of a 1031 Exchange, it’s important for you to remember that with the IRS there are no second chances or excuses, so it’s best to follow their 180-day deadline for closing on a new “like kind” property or you may lose the tax savings that come with a 1031 Exchange.