The business of real estate today is not an easy one, rather it is a business that can create opportunities. The recent economic turmoil has created great difficulties although the investors have realized the importance of proper planning and strategy before making a venture into real estates and property.
One of the most important issues in being successful in a real estate business is to know how to deal with issues of taxation. In order for a real estate business to be successful it is important for one to realize value of the capital that is up front. A property owner can now sell his property and then reinvest in the proceeds of like-kind property and defer the capital gain taxes. It is here that the concept of 1031 tax free exchange was created. According to this act, al corporations and individuals who were looking to sell an existing piece of property could use these proceeds for purchasing another and deferring the income tax that could have otherwise be owned.
This can offer significant tax advantages to real estate buyers. Although this is overlooked at times, it is considered to be one of the best-kept secrets in the Internal Revenue Code. So, if you have any questions you know where you will get your answers. They can help you go ahead in this interesting and competitive market of real estates.
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