1031 Exchange to Defer Taxes in a Deal

When you sell a property, you pay capital gains tax on the sale.

Generally, that can be 15% or 20% depending on your income tax bracket.

The question many people ask is “Do I have to pay that?”.

The quick answer is yes, unless you do a 1031 exchange.

You want to consult a tax professional to get correct information based on your situation.

The only way to avoid capital gains is if you defer the taxes by converting the sale into another purchase.

By setting up a 1031 exchange, you buy yourself time to locate a property and purchase another property by using the proceeds from the sale.

There are rules associated with this, so you want to consult your real estate and tax professional.

When you are selling a business for instance, this can be relevant as well. Part of the sale may be for the business or goodwill. Another part of the sale may be for real estate, if there is any attached.

If there is any real estate sold there will be taxes on the profit (the sale price minus the purchase price minus improvements).

By implementing a 1031 exchange, this is where you allocate funds from the sale of a commercial property, and you place it in another property.

You will have time to find and locate a property (i.e. 90 days), so you can roll that money in to another attractive property, which defers taxes.

Eventually, if you sell the property you will have to pay taxes, but you can sell it in a year that is more favorable, for you, for instance.

If you pass the property on to your heirs, then they might be able to avoid paying the capital gains tax on it from a sale.

We are not tax consultants or tax professionals, so please be sure to talk to your CPA about this.

The reason understanding 1031 exchanges is helpful, because after the sale of a business or commercial property, you may want to buy another property with some of the cash as a means of investment.

If you were to wait a year and then buy a property, you will pay tax on the first sale, when you could have saved the tax payment altogether.

The reason this exists is to encourage investment in the marketplace.

If you were going to buy a commercial property from the sale, you don’t want to pay tax on the sale, and then put after-tax money in to another property.

If you would like to hop on a call with us to go over things related to acquisitions and general business overview, please schedule a time here. We do a one hour deep dive where we go over your needs as it relates to acquisitions & business expansion, and then we go on the hunt for you to line up a business that fits.

Please reach out to us if you have any questions relating to acquisitions:

Email – acquisitions@jarbly.com

Phone – (800) 773-1523

Simply engage us below to get started whether it comes to bringing you qualified buyers where we list your business for maximal value or engaging us to bring qualified and vetted businesses that match your exact target criteria such as industry and EBITDA multiple if you are buying a business:

Buyer-Side Engagement – Retain Us to Provide you with Qualified and Vetted Businesses that Match Your Target Criteria

Seller-Side Engagement – Retain Us to List Your Business and Bring Legitimate Buyers to the Table

Leader in Business Consulting with Expertise in Representing Sellers & Buyers on Deals

Jarbly is a leader in business consulting with expertise in helping with revamped strategies, enhancing valuation, positioning for an exit, and business and real estate sales.

Contact Us

Phone: (800) 773-1523
Email: support@jarbly.com

About Jarbly

JARBLY’s focus is on business consulting with an emphasis on creating disruptive ventures and high quality boutique services to enhance a business’ valuation and lead to a high quality exit. As JARBLY has been heavily involved in the digital space including its own ventures for a decade with servicing hundreds of clients around the world, it is very well versed with understanding technical aspects of a deal including value proposition, product offerings, marketing, metrics, ROI, moats, and value-add initiatives. JARBLY has the expertise and knowledge on various businesses, industries, and deals and is very creative with structure to help increase valuation, or help guide you to a strategic exit. JARBLY has helped brands grow and also cultivates business related and real estate opportunities that are ripe for acquisitions, helping buyers and sellers get what they are seeking from a deal.

Whether it comes to growing your business, including acquiring businesses you want to understand the deal. We understand deals and where the maximal value in a transaction is. Our bread and butter is to provide a win for our clients including positioning your company for an eventual high quality exit. We have the unique and uncanny ability to bring high quality materials to the table and renewed strategies that consistently work. We help with financial enhancements, implementing systems, and prepping your business with materials including Prospectuses, Confidential Information Memorandums, and high quality Value Proposition Decks.

JARBLY looks forward to working with you to enhance your business profits nad valuation and help you on your next acquisition, exit, or real estate opportunity including both commercial and high end residential properties with high end service from a qualified team of passionate individuals that help you secure the deal. JARBLY LLC is part of Trend Realty in Sarasota, FL operating the Boca division as the JARBLY team.

Jaret will hop on a quick call with you to understand your and your business.

Text or call (800) 773-1523 and Jaret can arrange to have a brief consultation with you at your business location before embarking on a series of consulting calls or a full immersion.

1031 Exchange to Defer Taxes in a Deal