Both the US federal; government and numerous states (including the states of Oregon, Washington, and Idaho) allows you to sell an investment property or a business property that you use from your business purpose that you currently own, and buy another investment or business property that you would rather own…and
If done properly, you could avoid the payment of both federal and state capital gains taxes until you later sell (rather than again exchange) that replacement property.
- Sell the qualified property you no longer wish to own; and,
- Buy the qualified property that you would now rather own
- By legally deferring the payment of any capital gains tax on the gain that you made during your term of ownership,
- you can use ALL of your equity to acquire the next property.
YOUR HUGE ADVANTAGE:
- Pay no federal or state capital gains tax on the sale of your property
THIS ALLOWS YOU TO:
- Borrow less money when buying the next property
- Receive more cash flow from that next property
- Own your property free of debt much sooner
But…. SEEK WISE COUNSEL to avoid costly mistakes in procedure.
If you accidentally or intentionally violate the exchange rules, then pay the gains tax in FULL!