Investments & Syndications

Hoff & Leigh is qualified to assist investors with quality commercial property investment. Hoff & Leigh has the experience to find quality property for investment. Hoff & Leigh agents are not qualified to advise on legal or tax matters and recommends that all investors seek appropriate advise from a competent CPA or attorney or other advisors.

1031 TAX DEFERRED EXCHANGE

Thanks to IRC 1031, a properly structured 1031 Tax Deferred Exchange allows an investor to sell a property and reinvest the proceeds in a new property and defer all the capital gain taxes.

To understand the powerful tax deferral protection an exchange offers, consider the following example:
A Seller/Investor has a $200,00 capital gain and incurs a tax liability of approximately $70,000 in combined taxes (depreciation recapture, federal & state capital gain taxes) when the property is sold. 30,000 remains to reinvest in another property.

Assuming a 25% down payment and a 75% loan-to-value ratio, the Seller would only be able to purchase a $520,000 new property. If the same Seller/Investor chose to exchange, however, he would be able to reinvest the entire $200,000 of equity in the purchase of $800,000 in real estate.

Exchanges offer the following benefits:

    •    Financial Accounting Management
    •    Collect all rent and other income

A delayed exchange is the most common exchange format. The exchanger must properly identify potential replacement properties within 45 calendar days from the closing of the relinquished property (the first sold property). The new purchase (the replacement property) closing must occur within 180 days of that sale. The investor may identify 3 possible replacement properties.