Avoid Capital Gains with a 1031 Exchange

Released on = January 26, 2007, 8:21 am

Press Release Author = Joshua Axton / 1031 Interview

Industry = Real Estate

Press Release Summary = The maintenance involved in residential rental property
isn't worth it anymore. Why not sell that residential rental property, free up your
money to work harder and avoid capital gains tax.

Press Release Body = Sandy Springs, GA - January 24, 2007 - It's one thing, as a
homeowner, being responsible for maintaining a residence; it's another thing as a
residential rental property owner having to maintain rental properties. Each tenant
that occupies the investment brings problems such as wear and tear to the unit,
fiscal responsibility for rent and the most annoying of all problems: finding the
renter in the first place. Over time these problems simply become more complicated
and overwhelming; consequently, they force the owner of the property to consider
selling. That's where a 1031 exchange, tenant in common, investment comes in.

IRS Code 1031 allows investors to defer paying both federal and state capital gains
and depreciation recapture when they sell an investment property and buy another of
like kind. What this means is a residential rental property owner can sell their
investment without concern over capital gains if they purchase another rental
property. One might ask; why would an investor want to sell one problem property
and purchase another problem property? This is where a tenant in common investment
comes in handy. Instead of being forced to purchase another residential property a
tenant in common transaction gives the investor the ability to purchase a commercial
real estate property. A tenant in common investment, also known as a TIC, is a form
of holding title to real estate, common among unrelated parties. As a TIC owner you
have your own deed and complete control of your interest. You can sell your
investment at your convenience. There are many advantages to a tenant in common
1031 exchange transaction.

The hassles of owning residential real estate property are many and well known. The
more frustrating aspects are the maintenance of the property, acquisition of
tenants, paying property taxes and of course dealing with tenants themselves. A TIC
allows you to enjoy the income from the investment while enjoying the services of
profession property management. That means, the maintenance of the property,
acquisition of tenants and paying any applicable taxes related to the property
become the responsibility of the manager hired to oversee the property.

Very often the income from your commercial property will be higher than what you
were receiving from the original property. The substantial cash flow you earn can
be up to 60% sheltered by the depreciation of the new investment.

Residential real estate property can be rewarding and can also increase your cash
flow but the hassles of owning that property can easily outweigh the benefits. A
TIC can provide an investor with a solid property and little maintenance. Other
benefits include less risk and greater cash flow; so why not sell your residential
property and get into a tenant in common investment? More information is available
about 1031 exchange property (tenant in common) on http://www.1031interview.com.

About 1031 Interview: 1031 Interview is a non-profit website dedicated to increasing
knowledge and promoting the value of 1031 exchange properties nationally. Our
purpose is to provide a foundation of knowledge to investors interested in like-kind
property exchanges more commonly known as a 1031 exchange property or Tenant in
Common transactions.


Web Site = http://www.1031interview.com

Contact Details = 6851 Roswell Road
Atlanta, GA 30328
770-377-5344
info@1031interview.com

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