It makes sense for smart real estate investors who don’t want to see their expansion into new markets encumbered by tax concerns to consider the benefits of a like-kind exchange process.
Woodland Hills, California (PRWEB) November 02, 2012
“The 1031 Exchange option is emerging as a more popular avenue for real estate investors, given the election-year uncertainty over the future of capital gains taxes,” states Kevin M. Levine, Executive Vice President of Peak 1031 Exchange (http://www.peakexchange.com). “The political brinkmanship in Washington over extending or ending Bush-era tax cuts has left investors in the lurch regarding the normal asset disposition process that is a natural part of the ebb and flow of commercial real estate. Deferring capital gains is a primary consideration in a typical sale of property, and many are opting for the security of the like-kind exchange for property until the dust settles.”
Levine explains that, due to the stronger returns on real estate compared to traditional equities in 2012, commercial real estate has seen healthy activity in primary and tertiary markets in 2012 from institutional as well as smaller investors. For the small and mid-size investor, a potential increase in capital gains if tax cuts are allowed to expire creates significant barriers barring their contribution to commercial real estate’s current expansion. An increase in capital gains tax cuts will have the most impact on short term capital gains, defined by the tax code as profits from assets held for more than one year, which currently follows the same individual tax rate.
“We’ve seen a tremendous spike in 1031 Exchange transactions with our client base in wake of the possible increase in the capital gains taxes,” states Levine. “Our investor base is leveraging the advantages of the 1031 Exchange process to lower their tax rate by classifying the proceeds as 'long term capital gains,' " currently at 15% with a potential increase to 20% in January 2013 if there is no extension of tax cuts. “It makes sense for smart real estate investors who don’t want to see their expansion into new markets encumbered by tax concerns to consider the benefits of a like-kind exchange process.”
Peak 1031 Exchange, Inc. is one of the entities in the Peak Corporate Network headquartered in Woodland Hills, California. In addition to commercial loan modifications, the Peak Corporate Network entities offer mortgage lending, loan servicing, short sale services, foreclosure services, real estate brokerage and escrow services. For more information, visit http://www.peakcorp.com.
The Peak Corporate Network is a brand that represents a group of related separate legal entities, each providing its unique set of real estate services.