Sell vs.
Exchange? ... What's The Difference? |
| • |
|
Property Status:
A Rental Home |
| • |
|
Sales Price:
$250,000 |
| • |
|
Mortgage Balance:
$100,000 |
| • |
|
Original Purchase Price:
$150,000 |
| • |
|
Duration Of Ownership:
5 Years |
$250,000
- $150,000 = $100,000 |
>>
Add your state's "State Tax" here too!!! <<
(Nevada has no state tax!) |
|
|
If I "Sell" |
|
If I "Exchange" |
|
|
|
|
|
| Proceeds
From Sale: |
|
$150,000 |
|
$150,000 |
-------------- |
|
-------------- |
|
-------------- |
Payable
Taxes:
(Federal Only) |
|
$20,000* |
|
$0!! |
-------------- |
|
-------------- |
|
-------------- |
| Cash
To Re-Invest: |
|
$130,000 |
|
$150,000!! |
-------------- |
|
-------------- |
|
-------------- |
Purchase
power
with 25% down: |
|
$130,000 ÷ 25% =
$520,000 |
|
$150,000 ÷ 25% =
$600,000!!! |
That's
$80,000 MORE in purchasing power!! |
You
get to "defer" paying taxes on 100% of
your "gain"! |
* |
If you pay a
"State Tax" where you
live, your savings is even HIGHER! |
See The
Same Example Below
Adding A 10% "State Tax" |
|
|
If I "Sell" |
|
If I "Exchange" |
|
|
|
|
|
| Proceeds
From Sale: |
|
$150,000 |
|
$150,000 |
-------------- |
|
-------------- |
|
-------------- |
Payable
Taxes:
(State and Federal) |
|
$30,000* |
|
$0!! |
-------------- |
|
-------------- |
|
-------------- |
| Cash
To Re-Invest: |
|
$120,000 |
|
$150,000!! |
-------------- |
|
-------------- |
|
-------------- |
Purchase
power
with 25% down: |
|
$120,000 ÷ 25% =
$480,000 |
|
$150,000 ÷ 25% =
$600,000!!! |
That's
$120,000 MORE in purchasing power!! |
You get to "defer"
paying taxes on 100% of your "gain"! |
The examples above show that
exchanging can be POWERFUL!! |
Additional
1031 Exchange Pages |
*ALWAYS see your tax professional before you attempt
an IRC 1031 Exchange! |
©Copyright
Bart Austin, REALTOR®. All rights reserved. |
|
