California 1031 Exchange Explained

Internal Revenue Code allows a california property owner of california rental property to exchange california rental property and defer paying federal and state capital gain taxes (20%+ applicable state taxes) in the event that they purchase a like-kind california rental property. A tax-deferred exchange is a method by which a california property owners trades one or more relinquished california rental properties for one or more replacement california rental properties of like-kind, while deferring the payment of federal income taxes and some state taxes on the transaction.

Completing a california 1031 exchange with a tenants in common interest ownership in a california rental property allows california property owners not only to defer their capital gains taxes, but to also upgrade their california rental property into larger, institutional-grade california rental properties. Essentially, california 1031 exchanges allow california property owners to use all of the proceeds from their sale as leverage to gain access to more valuable california rental property.

If you are thinking of transferring any california rental property, contact us today for more information on california 1031 exchanges. A california 1031 exchange permits 1031 california property california property owners to sell a california rental property and defer tax payments by reinvesting the proceeds into a like-kind 1031 california property or california rental properties. A tenants in common is a form of ownership that permits participants to enjoy the rewards of california rental property ownership without participating in the ongoing management of a california rental property. A tenants in common exchange yields an inherent interest in california rental property and offers several benefits as a qualified california 1031 exchange.

Performing a california 1031 exchange allows california property owners to use all of the proceeds from the initial sale of california rental property as leverage for entering into more lucrative california rental property deals. The advantages of entering into a tenants in common are increased cash flow and diversified investment portfolios while deferring capital gains taxes at the same time.

If you recently sold a california rental property or you’re considering selling a current california rental property, we can match you with a california 1031 advisor that can assist you in facilitating the exchange process.