hi there in this video i'm going to talk
about how you can save
on the taxes that you owe
when you're selling a property so
there's something that's called a 1031
exchange
or i've heard another term that is used
to refer to a called a starker exchange
and basically what this means is that if
you own
a hundred acres of farmland and you sell
that hundred acres for
a million dollars if you can go out
after you sell the farmland if you can
go out and find
another piece of farmland to purchase
you can avoid paying the capital gains
taxes
with the money that you made
on the farmland that you just sold
so what you need to do
when you're closing on the property
number one you have to make sure no
normally there's a title company that's
going to be putting closing statements
together and performing the the closing
so if you're working with a realtor or
not
make sure that your realtor or yourself
is talking to the title company and
you're going to let them know
before the closing and and i would let
them know as soon as possible if you get
an accepted offer on a piece of property
let the title company know hey i'm going
to be doing a 1031 exchange here so i
want to make sure that that paperwork is
prepared
and there at the closing so that when i
when i close on the sale of the land
that i'm selling now
i can fill out the proper paperwork that
i'll need to do in order to to perform
that 1031 exchange and to go out there
and be able to find another property to
purchase
the great thing about that is that if
you say you inherit 100 acres and you
sell for a million dollars
you have to pay capital gains you know
20
of the profit
on that million i mean that's a lot of
money that you have to pay in taxes so
if you can buy
another piece of property you don't have
to pay those taxes you're basically
taking your money
from from the land that you just sold
and you're just parking it somewhere
else
now this might be different in state to
state but here in wisconsin
if you close on a piece of property that
you sold and you're gonna do a 1031
exchange you have 45 days
to identify
a property that you could potentially
buy
so what you would want to do is make a
list of any potential properties that
you might end up buying even if you
haven't talked to the owner yet make
sure all these properties are on a list
you have to identify a property within
45 days
and then you have to close on that
property within 180 days of
when you sold your original property so
the 45 days
is the time limit that you have you have
to identify something within 45 dales
days of when you've sold
your original property and then you have
180 days
not an additional 180 days on top of the
45 it's you have 180 days to find and
close on another property
now if you can't find a property which
is definitely the case for a lot of
people farmland right now is hot uh
commercial land commercial buildings
it's it's just a hot market so there's
no guarantee that you're gonna be able
to sell something and then find
something
to to purchase that's similar to that so
there is there are other alternatives
there are companies that that buy all
kinds of different you know buildings
and properties in in the commercial
realm and basically what you would do is
you would give this company
inland is is the name of one you give
this company
the money the sale proceeds from your
original purchase and then
you again you get to avoid paying
capital gains on the profit and then you
also get a return on what you're
investing into that company so it could
be you know maybe four or five percent
that that you're getting back and and i
don't know all the details on this but
it could be monthly that that you're
getting that you're getting a check for
what the returns are on what you
invested and then ultimately if you want
you can take your money out of there
once they sell
one of the properties that are in this
portfolio now there is risk involved
here like any other real estate so if
you give this company money and they're
going out and they're buying all of
these buildings now what if the real
estate market drops and one of the
buildings that they bought they're now
having to sell for a loss
well that means when the time comes for
you
to take the money out that you put in
you might not get it all back
because if there was a loss on something
well you're affected by that as well so
it's just it's another option it's
something that that you could look into
as well but ideally you'd want to just
find a similar property now there's a
list of properties as well i'm working
with somebody right now that has an
apartment complex that they want to sell
they've got a list from their accountant
of different properties they don't have
to buy another apartment complex they
can buy something else that's going to
generate rent a farm would would
actually you know farmland would would
generate rent um the house the farm
house if there's a farmhouse on there
that you're going to rent out would
generate rent so you would want to talk
to your accountant
and they would be able to give you the
list of properties that you would be
able to purchase
so if you're selling vacant land
you may only be able to buy vacant
vacant land or maybe there's a list of a
couple different things that you can buy
if you're selling an apartment or a
commercial building then you know you've
got a list of different things that you
can that you can buy but this is a great
way to save yourself some money on taxes
and i just wanted to do a video
explaining what this was and if you are
somebody that that has a large piece of
land that maybe
you thought about selling it but then
you're saying yourself well if i sell it
what am i going to do what am i going to
do with i got to pay taxes on all of the
proceeds well this is an option for you
you can reach out to me if if you want
more details on that and i can help as
well i am a
licensed real estate agent i do a lot of
larger
uh land and commercial uh purchases and
and sales for for clients so it's
something that i do have experience with
and i can help if you've got something
like that as well uh thanks for your
time and watching this video if you
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do so have a great rest of the day and
god bless