Investment Services

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Whether you are an experienced real estate investor, or just starting out, you need to work with a team of professionals that can help you succeed.

Benefits of using Phoenix Realty

Our Investment Services include:

1031 Tax Deferred Exchange

A 1031 Tax Deferred Exchange is a powerful tool for investors who wish to sell an investment property and invest in another. Thanks to Internal Revenue Code (IRC) Section 1031, a properly structured 1031 exchange allows an investor to sell a property, reinvest the proceeds into a new property, and to defer all capital gain taxes from that sale to the future. As noted, IRC Section 1031 (a)(1) states:

"No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment, if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment."

Qualified properties would be those used in a business, trade, or for investment; including rental property, land, residential, industrial, and commercial real estate. For a 1031 exchange to work properly, you must intend to purchase a similar qualified property within a set period of time.

Usually when an investment property is sold, the Seller has to pay capital gains taxes on the profit from the sale; addendum taxes may be owed to the Federal and State government as well. Contingent upon how long the property was owned and the amount of earnings realized from the sale, the tax burden from the sale may be significant.

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A 1031 exchange provides a means of diverting funds from one property directly into the purchase of another like-kind property, deferring capital gains taxes until that new property is sold, or that property may in turn be the subject of a 1031 exchange sale as well to defer the tax burden yet again.

To understand the powerful protection a 1031 exchange offers, consider the following example:

As the above example demonstrates, a 1031 exchange protects investors from immediate capital gain taxes as well as facilitating significant portfolio growth and increased return on investment.

Key points regarding a 1031 exchange

If you have additional questions regarding a 1031 Tax Deferred Exchange or would like a referral to a company we partner with that will manage the exchange process for you, be sure to let us know and we'd be happy to provide you with further reference material or referral companies.

Frequently Asked Questions

Phoenix Realty
& Property Management, Inc.

400 E. Simpson St.
Suite 220
Lafayette CO 80026
Phone: 303.666.4300
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