1031 Exchanges

How Tartan can help you defer capital gains tax on the sale of real property through a 1031 exchange.

One of the most powerful tools available to real estate investors comes in the form of tax-deferment on proceeds from the sale of real property. Internal Revenue Code Section 1031 lays out the conditions in which an investor can defer capital gains tax on the sale of real property when the sale proceeds are invested in another property within a specified period of time. For those looking to trade out of a real estate asset that has been fully depreciated or has experienced significant appreciation, these “1031 exchanges” provide a financially advantageous way to avoid paying capital gains while growing one’s portfolio.

A boardwalk with empty benches lines a waterfront in front of a large, modern building with many windows, glowing warmly at sunset. The sky is pink and purple, and street lamps and planters line the path.
Historic brick buildings with large arched windows line a cobblestone sidewalk on a quiet street; a blue car is parked beside trees, and small shops occupy the ground floors under a clear sky.
A large green sign in front of a warehouse building reads For Lease, Warehouse Space, 4,000sf - 26,000sf Available with contact information for Tartan Properties and a mostly empty parking lot.

The challenge with these exchanges is that they require a certain expertise to navigate, and this is where TARTAN can provide value. To qualify for a 1031 exchange, certain requirements must be met and deadlines observed. Also, there are different kinds of exchanges to know: in a “direct swap,” for example, the owner does a simultaneous exchange for another piece of property. More common is a “deferred exchange” in which the owner sells property and then purchases one or several like-kind properties within the defined period. In a “reverse exchange,” the replacement property is purchased first and held in escrow until the original property is sold.

Knowing the market as well as we do, Tartan can work with each client to set a listing price and create a marketing strategy that will most likely result in a closing time and price range that meet your individual needs.

Client Success Stories

Success Story

The owner of a large, aging industrial warehouse site in Springfield, VA, had decided to dispose of his fully depreciated asset and hired TARTAN to sell the three-building portfolio.

Success Story

When our client made the decision to retire and close their furniture store after a twenty year run in the same location, he had to consider the liquidation of the store inventory and what to do with the retail condo that had been purchased thirty years prior.

Success Story

First Agape Baptist Church faced challenges maintaining their 15,000 sq ft property amidst gentrification, an aging congregation, and the pandemic.

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