If you are looking for commercial properties, there is no better place than in the San Diego Area. Contact a San Diego commercial real estate who can guide you toward more profits taking advantage of the 1031 exchange.

The 1031 Exchange code gets its name from the Internal Revenue Code Section # 1.103) is a code that can end up saving individuals money on certain business and investment property transactions. ‘Profit’ taxes must be paid on real estate and personal property if any profits were made. However there might be an exception.

The 1031 Exchange will allow some sellers of some real estate and personal property to be exempt from paying the ‘capital gains’ taxes if they are “exchanging” the property they sell, for a new property of “like-kind”. This code only applies to business property and investment property.

Imagine selling a property which had been used as an office, and then buying a similar property to be used for the same purpose.Any profits made on the sale are subject to be taxed. The new property does not have to be the same type, as long as it is going to be used for the same purpose as the one sold.Similarly, a property being purchased for investment purposes can be sold to buy a different property for investment purposes, without taxing the profit. The definition of exchanging for a “like-kind” property allows for a great deal of flexibility.

At times, there are some time factors to be considered. The purchase of the new property must take place within 180 days of the sale of the original property.Sometimes it is more financially efficient to make the sale and purchase as close in time as possible. The 1031 code requires a qualified intermediary after 45 days of the sale to be sure that the gains are used towards the purchase of the new property. This prevents individuals from using the profit for their financial gain.