October 2007 Archives

Aside from the implementation of your actual business strategy, there is nothing more important than being aware of, and utilizing, one of the greatest provisions of the Internal Revenue Code -- the 1031 exchange. The 1031 exchange, named, intuitively, after its provision in the Code itself, allows for the deferral of income tax on gains from property held for investment purposes by allowing those gains to be exchanged for similar (“like kind”) investment properties. I highlight “deferred” because it doesn’t allow an investor to avoid tax on the gains, but it allows tax on those gains to be deferred for as long as they are being held in a qualifying property. The great part about the 1031 exchange is that you can use it over and over again, as many times as you want. Therefore, you can defer taxes on your gains theoretically for your entire life. There’s also the potential, with some creative tax planning from your accountant, to never have to pay these deferred taxes, if you set it up in a way to pass it on to your children or even a charity (don’t quote me on this -- definitely check with your accountant on this one). Either way, the 1031 exchange is the single greatest gift the government has ever handed real estate investors. So, let’s see how it works:

How to Get Started Investing in Real Estate

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gettingstartedinrealestate.jpgCongratulations to Stewart Hsu, at stewarthsu.com, the winner of the October 17 article submission contest!! The article offers some very good advice on the beginning stages of real estate investing. His article, “How to Get Started Investing in Real Estate,” is featured in full below. Enjoy!

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