Like Kind Exchange Explained

Internal Revenue Code provides that no gain or loss shall be recognized on the exchange of rental property is held for productive use in a trade or business, or for investment. A tax-deferred exchange is a method by which a property owners trades one or more relinquished rental properties for one or more replacement rental properties of like-kind. Such an exchange allows the issuer to defer the payment of federal income taxes and some state taxes on the transaction.

The theory behind internal revenue code is to allow the property owners to reinvest the sale proceeds into another rental property, foregoing any economic gains that may have been realized from the sale. If you have recently sold, or are thinking of selling rental property, we can assist in matching you with a qualified like kind broker. A like kind broker can help you explore your like kind exchange options. Contact us today for a free consultation.

Benefits of a Like Kind Exchange

Benefits to a like kind exchange include:

Like Kind Exchange Benefits
  • Deferred capital gains taxes

    Like Kind Exchange Benefits
  • The potential to yield more cash flow on an annual basis

    Like Kind Exchange Benefits
  • More money to reinvest in a newer rental property due to zero capital gains taxes calculated on the old rental property

  • Consolidate your investment portfolio by electing a tenants in common exchange

    Like Kind Exchange Benefits
  • Achieve your investment goalsThe benefits of investing in a tenants in common structured rental property are definitely worth investigating. You have the ability to:

  • Invest in larger, institutional grade properties.
  • Diversify Your rental property Portfolio

    Tenants In Common Benefits
  • Diversify across different types and sizes of rental propertys as well as geographic markets, potentially increasing both the value and safety of your rental propertys.

    Completing a like kind exchange with a tenants in common interest ownership in a rental property allows property owners not only to defer their capital gains taxes, but also to upgrade their rental property into larger, institutional-grade rental property.

    If you are interested in learning more about tenants in common exchanges available to you, contact us today.

    Tenants In Common Triple Net Lease

    A more popular alternative to sole triple net lease ownership is an investment in a single triple net lease commercial rental property by multiple property owners as individual property owners. This type of ownership is otherwise known as a tenants in common ownership.

    Triple Net Lease-tenants in common rental properties can be either single tenant triple net lease or multi-tenant triple net lease rental properties, and are commonly converted into such through a master lease. This type of lease is structured in such a way that they lease the rental property back from the property owner on a triple net lease basis.



    Tenants In Common-triple net lease advantages include:

    1. Freedom from the hassles of day-to-day management

    2. Readily available rental property

    3. The opportunity to invest in higher-quality institutional rental properties

    4. Assistance with the entire exchange process

    5. Flexible investment sizes based on rental property type and location



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