The True Power of Exchanging…
Simply put, a §1031 exchange allows your clients to sell their investment property, while at the same time deferring capital gains taxes by reinvesting 100% of their equity into another investment property of equal or greater value.
The true power of exchanging is the ability to meet investment objectives without losing equity to taxation. Known as leveraging, this method of acquiring real estate helps your clients purchase property many times the value of their initial investment.
At Starker Services, we maintain that Realtors play a key role when they point out potential benefits of tax-deferred exchanges to their clients. Sellers can employ the services of an Exchange Intermediary at any point prior to the property closing - after that it is too late.The main requirement is that your client's property or business asset has been held by the client for productive use in a trade or business, or for investment purposes, and be exchanged for like-kind replacement property.
Keep in mind your clients:
Clients are able to maximize their capital by deferring the taxes that would otherwise be incurred on an outright sale of their property by utilizing an exchange. They can use the entire amount of the equity from the exchange to acquire substantially more replacement property.