If an investor sells property they pay tax. Taxes are paid on capital gain, not equity or profit. However, property that qualifies for preferential treatment under Internal Revenue Code §1031 is treated quite differently.
"No gain or loss shall be recognized if property held for productive use in a trade or business or for investment purposes is exchanged solely for property of a "like-kind."
Investors often mistakenly believe they must acquire property “identical” to their relinquished property. They are surprised to learn a wide variety of properties can be considered "like-kind."
"Like-kind" does not refer to the nature, character or type of property. Instead, it addresses the intended use of the property. Provided the property is initially acquired and held for either business or investment purposes, it can qualify as a suitable replacement property under IRC Section 1031.
For example, any of the following can be considered "like-kind" property exchanges: a duplex for a commercial rental, bare land for a fourplex, a rental house for vacant land or an apartment building for an office building. Investors do not have to exchange for exactly the same type of property as relinquished; but it has to be for investment, not a personal residence.
The benefits of exchanging include using leverage to maximize your investment dollars to property diversification to allow you the widest range of investment freedom. 1031 Tax Deferral can range anywhere from a simple buy and sell of two properties to a complex, multi-leg, multi-property transaction involving a delayed, reverse or construction exchange. The investment strategy and the nature of the transaction will decide which exchange best suits your needs. Imagine selling rental property or land, acquiring new real estate of any type and not paying one dime in capital gain taxes. Thousands of investors are profiting every day simply by using the tax deferred sale IRC §1031! |
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1845 N Maggie Way
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602-Maricopa
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Hidden Valley Estates
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MLS®
$39,000
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64,469 sq. ft.
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Lot / Land
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Farm / Acreage
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0 Mesquite Road
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602-Maricopa
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Hidden Valley Estates
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MLS®
$49,000
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87,120 sq. ft.
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Lot / Land
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Farm / Acreage
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0 N Maggie Way
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602-Maricopa
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Hidden Valley Estates
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MLS®
$69,000
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108,900 sq. ft.
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Lot / Land
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Farm / Acreage
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200 W Walnut St
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305-Gila Bend
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Gila Bend
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MLS®
$90,000
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435,600 sq. ft.
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Lot / Land
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Farm / Acreage
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000 W Garnet Road
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Hidden Valley Estates
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MLS®
$96,000
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Lot / Land
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Farm / Acreage
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5597 N Ralston Rd
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602-Maricopa
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Metes and Bounds
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MLS®
$99,000
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54,450 sq. ft.
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Lot / Land
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Farm / Acreage
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0 W Barnes
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602-Maricopa
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Hidden Valley Estates
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MLS®
$110,000
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108,900 sq. ft.
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Lot / Land
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Farm / Acreage
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53395 W Clearview Rd
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602 - Maricopa
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Hidden Valley Estates
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MLS®
$136,000
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217,800 sq. ft.
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Lot / Land
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Farm / Acreage
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(1 Photos)
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0 W Wildwood
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602
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Hidden Valley Estates
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MLS®
$145,000
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Lot / Land
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Farm / Acreage
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1St & Main
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305-Gila Bend
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Gila Bend
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MLS®
$180,000
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871,200 sq. ft.
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Lot / Land
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Farm / Acreage
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(1 Photos)
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0 N Jenkins Way
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602
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Hidden Valley Estates
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MLS®
$185,000
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Lot / Land
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Farm / Acreage
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(7 Photos)
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0 W Val Vista Rd
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601-Maricopa
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Papago Butte Ranchos
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MLS®
$185,000
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143,748 sq. ft.
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Lot / Land
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Farm / Acreage
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(8 Photos)
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11497 N Brewer Road
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601-Maricopa
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Papago Butte Ranchos
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MLS®
$205,000
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143,748 sq. ft.
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Lot / Land
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Farm / Acreage
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(6 Photos)
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48985 W Papago Road
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601-Maricopa
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Hidden Valley Estates
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MLS®
$212,000
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143,748 sq. ft.
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Lot / Land
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Farm / Acreage
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(1 Photos)
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0 N Green Rd
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602
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Hidden Valley Estates
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MLS®
$250,000
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Lot / Land
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Farm / Acreage
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Why Land is a Sound Investment Strategy
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Land is a tangible physical asset of dependable and safe value. Carefully selected land investments can create significant returns and a secure future. This philosophy has been expounded and successfully proven over many decades - if not centuries.
Fortuna recognises that Land has been the cornerstone of the world's wealthiest individuals and most successful investors over the last century. Not only does it rarely under-perform (if for only very short periods of time); it is also immune to many of the external factors that produce day-to-day cyclical swings in world markets.
An investment in land can show considerable advantages compared with stocks, bonds and funds, and has been consistently recommended. Land does not fluctuate according to stock market whim or economic policy. It has a dependable 'bottom line' value as a finite resource - "they're not making any more" - and that value will tend to rise purely because of a sustainable and growing need for it. This is the most basic of market force mechanisms - supply and demand. So it is extremely unlikely that any land investment will decrease in value - unlike other investments that can fall as well as rise.
Although in select markets, from time to time, considerable gains can be made short-term, generally land is a long-term investment. This is also one of the reasons why an investment in land should be considered as part of retirement planning - dependable growth with no administrative charges that erode value.
Beyond this secure position, an investment in land that is well positioned in the general path of future development will naturally show enhanced growth. Land that actually receives development permission, against a carefully engineered proposal, will show significantly increased growth. We can assist you in gaining such approvals.
Fortuna actively encourages clients, their lawyers, accountants and bankers to discuss the basis for investment, or any legal or financial aspect of it.
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