MInTheGap

We’re in the house hunting market again– and it’s definitely an interesting time to be looking.  With the markets going down and the Fed lowering interest rates, this seems like a great time to buy a house and lock in a low rate.

A few years back, my wife and I actually looked into buying a building that we would have rented out.  We’ve also thought of renting out our current house after purchasing a new one.  One of the interesting things, had we pursued this concept, would have been a special law on the books to help those that are selling and purchasing “like-kind” buildings in that you can pass along earnings tax-deferred.

It’s called a 1031 Tax-Deferred Exchange, and I learned about it at the 1031 Exchange Alliance.

From what I understand, you can reinvest what you’ve made off of an apartment building for a farm/ranch, an office building for a hotel, raw land for retail space, etc.  Basically, it’s a way for you to continue investing profits off of land investments without getting the tax hit on the sale.

This would be a big benefit for those that have looked at land as a good place to invest, because you could continue to increase your assets without being hit with big tax payments.

Who should consider one of these exchanges?  Those that have property that are used in the taxpayer’s trade or business or property for investment– so this is not for everyone.  However, if you find that you qualify, look up the Exchange Alliance and see how you can save yourself from paying Uncle Sam more than you need to!

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