Learning From A 1031 Exchange Company On How To Start Saving Money By Deferring Taxes
Investment Education Staff (May 2nd, 2009) Writes:
by Eric T. Rightley
The 1031 Exchange process starts with your CPA or accountant. The discussion should include the amount of taxes owed if you sold the property outright. The adjusted basis would be determined, and based on this adjusted basis, you can determine what the “normal” capital gains tax liability would be. Also, you can determine the amount of taxes that would be due to depreciation recapture. This depreciation recapture is currently taxed at a maximum rate of 25%. The capital gains that are attributed to depreciation are taxed at a higher rate.
Likewise, your CPA or accountant will determine how much of the gain relates to normal appreciation from the natural increase in the value of the property. This appreciation is currently taxed at a maximum rate of only 15%. Your CPA will also determine if any state income tax or capital gains tax would be incurred. This …


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