1031 TAX BENEFITS

Exploring 1031 Tax Benefits and Other Advantages of 1031 Exchange

Discover the Advantages of 1031 Tax Benefits and Why Savvy Investors Have Long Relied Upon a 1031 Exchange to Achieve Their Investment Goals.

Defer Capital Gains

The most common reason investors trade their real estate through a 1031 exchange is to defer paying capital gains taxes. Taxes are only paid when an investor cashes out on their investment.

Trade Up

IInvestors can leverage a 1031 exchange to trade up for a higher-value property. For example, an investor can sell a $500,000 investment property and purchase one for $1,000,00 without paying capital gains on the initial sale.

Trade Out of State

For investors looking to place their capital outside of California, a 1031 exchange provides a solution. This exchange permits investors to trade into any market within the country, allowing them to identify new markets that better match their investment goals.

Avoid Paying Income Taxes

Investors can leverage 1031 Tax Benefits to exchange properties across state lines and potentially trade into states without income tax, such as Wyoming, Washington, Texas, South Dakota, Nevada, Florida, or Alaska. To fully understand the implications of utilizing these benefits, it's recommended that you consult with your CPA for further guidance.

Reset Depreciation

To compensate for wear and tear on a property, the IRS allows real estate investors to depreciate their real estate investment over 27.5 years. By trading into a new asset, investors have the option to reset their depreciation schedule. This opportunity should always be discussed with a certified accountant.

Diversify Your Portolio

A 1031 exchange allows investors to diversify their portfolios. In addition to accessing new markets, investors can diversify by trading into new asset classes and changing the number of investment properties they own. For example, an investor can trade an apartment building for a single-tenant retail property or from two office buildings into one industrial asset.

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Not an offer to buy, nor a solicitation to sell securities. All investing involves risk of loss of some or all principal invested. Past performance is not indicative of future results. Speak to your finance and/or tax professional prior to investing. Any information provided is for informational purposes only. Securities offered through Arkadios Capital, member FINRA/SIPC. Advisory Services offered through Arkadios Wealth. Perch Wealth and Arkadios are not affiliated through any ownership.

1031 Risk Disclosure:

There is no guarantee that any strategy will be successful or achieve investment objectives;
Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments;
Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
Potential for foreclosure – All financed real estate investments have potential for foreclosure; ·Illiquidity – Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments;
Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;
Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits

No offer to buy or sell securities is being made. Such offers may only be made to qualified accredited investors via private placement memorandum. Risks detailed in a private placement memorandum should be carefully reviewed, understood, and considered before making such an investment. Prospective strategies and products used in any tax advantaged investment planning should be reviewed independently with your tax and legal advisors. Changes to the tax code and other regulatory revisions could have a negative impact upon strategies developed and recommendations made. Past performance and/or forward-looking statements are never an assurance of future results.

Many of the investments offered will be only available to those investors meeting the definition of an Accredited Investor under SEC Rule 501(A) and offered as Regulation D private placement securities via a Private Placement Memorandum (“PPM”). Prospective investors must receive, read, and understand all the risks associated with buying private placement securities. Investments are not guaranteed or FDIC insured and risks may include but are not limited to illiquidity, no guarantee of income or guarantee that all tax advantages or objectives will be met and complete loss of principal investment could occur.