Sep 28, 2023
Maxwell Finch
Welcome to the 2023 Guide to Colorado's 1031 Exchange. This guide is designed to provide essential insights for savvy investors looking to take advantage of tax deferment and property investment strategies.
What is a 1031 Exchange?
A 1031 Exchange, also known as a like-kind exchange or Starker, is a powerful tax deferment strategy used by savvy real estate investors. It allows an investor to defer paying capital gains taxes on an investment property when it is sold, as long another "like-kind property" is purchased with the profit gained by the sale of the first property.
How Does a 1031 Exchange Work in Colorado?
Colorado, like most states, follows the federal tax code for 1031 exchanges. This means that the process and rules for conducting a 1031 exchange are the same as they would be in any other state.
Step 1: Sell Your Property
First, you sell your property. This can be any type of investment property, including rental properties, commercial properties, and more.
Step 2: Identify a Replacement Property
Next, you identify a replacement property. This property must be of "like-kind" to the property you sold, but it does not have to be the same type of property. For example, you could sell a rental property and purchase a commercial property.
Step 3: Purchase the Replacement Property
Finally, you purchase the replacement property. The money from the sale of your original property must be used to purchase the replacement property. If all of these steps are followed, you can defer paying capital gains taxes on the sale of your original property.
Why Use a 1031 Exchange in Colorado?
Colorado's real estate market is booming, making it an attractive location for investors. By using a 1031 exchange, you can leverage your investments to purchase more valuable properties, all while deferring taxes.
How Can Castling Tax Help?
As a qualified 1031 intermediary, Castling Tax can guide you through the 1031 exchange process. We can help you identify suitable replacement properties, manage the exchange of properties, and ensure that all IRS rules are followed.
Contact Us
If you're ready to take advantage of a 1031 exchange in Colorado, contact us today. We're here to help you make the most of your investments.
Free 1031 Exchange Capital Gains Calculator
Want to see how much you could save with a 1031 exchange? Use our free 1031 exchange capital gains calculator to find out.