1031 Exchange New York
How to Do a 1031 Exchange in New York?
Taxes aren’t exactly one of the most exciting topics unless, of course, you are an accountant. The old adage says that there are two things you can’t avoid – death and paying taxes. But, what if you could defer paying taxes?
Like any other important financial transaction, an apartment sale in New York is also liable to be taxed. If it’s an investment property and not your primary residence, you can be taxed on your capital gains or the profit you generate on the sale of the apartment or building. This has led to many New Yorkers looking for a simplified tax deferral program called the 1031 exchange, which lets you put off paying tax on these kinds of properties. It’s a brilliant strategy if you purchased during a downturn or had insider pricing on an apartment, or have held the place for many years, and seen the value appreciate—all reasons to consider deferring the capital gains tax payment. If you complete the exchange, the profit stays with you.
You will pay this tax eventually, but if you delay the payment for about 10 years, you will have had the money for 10 years and haven’t had to pay a single penny towards capital gains taxes. Please note, there are a lot of rules and red tape linked with the 1031 exchange program.