1031 tax free exchange in Missouri

Every Dollar Saved in Taxes Will Allow an Investor to Purchase 4 to 5 times as Much Real Estate

Tax deferment increases leverage.  Consider that 10% appreciation is converted to a 50% profit with a 20% down payment.  Let me illustrate:

An investor sells a fully depreciated property and the capital gain is $200,000.  This amount is subject to taxation.  Assuming a 35% tax bracket, the Tax would be

 $200,000 x 35% = $70,000

If the investor sold the property outright rather than exchanging it, they’d have $130,000 to re-invest.  If the investor exchanged the property pays no capital gains and has $200,000 to re-invest. 

Both investors purchase a new property using 20% down payment.  The sale investor can purchase a building worth $650,000 while the exchange investor can purchase a building worth $1,000,000.  That amounts to a $350,000 loan from Uncle Sam to invest in real estate!  This is one transaction.  If 1031 exchanges are utilized again on the new property, the leverage will again be increased. 

The Lake of the Ozarks has an abundant supply of properties that qualify for tax free exchanges.  You can sell your rental or investment property, even raw land, and buy a vacation home or even a retirement home at the Lake of the Ozarks legally.  It is even possible to sell this as your personal residence and eliminate the capital gains altogether! You must follow certain guidelines, but it can be done.  The key is to make sure you have an agent that knows what is going on, and is experienced with these matters.  

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