1031 Tax Deferred Exchange Properties

Trading properties is more about exchanging one set of values and benefits for another. At times it is difficult to "Sell" a property. When a property no longer meets your needs and it is time to move or get out of the investment, there are many alternatives other than a "Cash Sale". There are usually Tax considerations, debt considerations and just how to take your equity. Equity can be in several forms, for example; Cash, Other Property, Personal Property, or, Promissory Notes.

In an outright "Sale" or an "Exchange" a couple of things have to be dealt with. The number one thing that demands our attention is "Debt". That lien holder loaned you the money and in the event of a sale they want the money. You made the Debt and so you really "Own the Debt" and that debt needs to be dealt with. So now, that debt has to be paid or moved to another property. However, You also own the "Equity", if there is any. Only the equity is a variable because it is always the "True Unknown" and Equity or lack thereof is the major dis-agreement of Buyer and Seller. The perceived amount of equity is why we have appraisers trying to figure that out. However, any Equity is yours and you can take it with you, or move it to another property, if it is actually there.