1031 Exchange – Aging Rental Property?
If you have owned an Investment property for 20+ years and have been depreciating the asset all of these years, you need to seriously consider a tax free exchange of like property.
Once you have depreciated an asset completely over 20+ years, your tax write off is little to nothing. At that point most of the rental income is taxed as regular income. One of the major benefits of owning investment property is to have the ability to take advantage of the tax benefits associated with ownership.
If you have aging rental property you can sell the property and move the proceeds to new property, tax-free, and gain the ability to depreciate the new property over the next 20+ years; saving immediately and moving forward on Income Tax! On paper the depreciation will cause a loss or very little profit for tax purposes. Check with your accountant to see how it would affect your situation. For details on how a tax-free exchange could work for you call or email me for an appointment.Posted by