FCR Investments

A personal approach to developing wealth.

Internal Revenue Code Section 1031 permits the deferral of capital gains and other taxes on the sale of property. This is a means to preserve the wealth that you have worked hard to accumulate and to grow your assets by reinvesting the tax savings.

These exchanges have been around for nearly 90 years, but their popularity has increased in the past decade as the number of real-estate investors has exploded. A 2005 study by Deloitte Tax LLP found that 1031 exchange transactions in 2003 totaled about $200 billion in value, the most recent data available.

A common type of exchange is the " Forward Delayed Exchange," wherein property is sold and the proceeds are used to purchase "like kind" replacement property within certain timeframes. To qualify for a safe harbor tax deferral, proceeds should be held with a qualified intermediary between the sale and purchase.

"Like kind" refers to property similar in nature and character notwithstanding differences in grade or quality. As such, raw land held for investment may be exchanged for any combination of the following:

° Single Family Rentals
° Farms/Ranches
° Office/Commercial
° Retail/Industrial ° Motels/Hotels
° Some Recreational Properties
° Multi-Family Rentals
° Raw Land
° Leasehold Interest of 30 years or more FCR Investments can guide you through the various steps, which include:

1) Completing documentation to establish the 1031 Exchange.

2) Identify 1-3 replacement properties within 45 days following the sale of the relinquished property.

3) Purchase the replacement property within 180 days following the sale of the relinguished property. The replacement property must be one of the identified properties. At closing, the proceeds are paid directly through an exchange facilitator and the exchanger receives the Deed to the Replacement Property.
There are other types of exchanges, such as reverse exchanges, improvement exchanges, and personal property exchanges. First California Realty, Inc. will work with you to provide expertise from our staff and from our exchange experts in the community.

Please call if you would like to discuss the specifics of your situation and set up a positive cash flow for your 1031 Exchange.