Having a family inheritance is always great, but in many cases, the inheritance may be too difficult to manage. Many families, for instance, have inherited from their grandparents or parents, farms and ranches. And while young individuals are migrating to a large metropolis, managing those and making them profitable is rather a difficult process. In these cases, a different approach might be the missing puzzle piece. The 1031 Section of the trust allows tax-deferred property exchange, and this may be the exact answer to all your questions. Below we have some simple guidelines that will help you in the process of swapping your grandparents’ old ranch with a more versatile commercial property.

Check in with a specialised agency before jumping into action

When you decide that you want to become involved in swapping DST properties, you must first discuss what your options are with a dedicated company, a company with plenty of experience and expertise in the field. The whole transactions must follow the strict regulations of the IRS Revenue Ruling 2004-86, so you want to make sure that all steps and procedures are strictly followed. By doing so, you will make sure that you keep the transaction tax-deferred and that no unexpected expenses will ever appear.

Why should you consider 1031 property exchanges?

The main reason for which you want to re-invest under this section is that it will allow you to “trade up” without additional expenses or paying taxes.

It allows you to trade unproductive commercial properties for properties with an increased potential on the local market (apartment building for a commercial centre or a ranch for a commercial centre; the type of the swapped properties is irrelevant).

It allows you to think in perspective and invest in types of properties that are promising in the future.

It will change your lifestyle. Many are considering these investments when they are searching for a business opportunity with low management demands. This allows the owner to travel more or even retire.

It can help you consolidate your ownership status. For instance, if you swap multiple small properties for a larger one, your business perspectives become more secure.

Swap a hard to sell property with a property that practically sells itself.

How difficult is it to act under the 1031 property exchange law?

In theory, the process shouldn’t be too difficult, because you will be hiring a professional agency to manage the entire process and offer you guidance. These agencies handle all small aspects of these transactions, from finding a suitable property that meets all your requirements, to negotiating the price and other administrative aspects of the whole transaction. So, is it difficult to swap tax-deferred properties? With pertinent assistance, no.

These are some simple ways in which you can turn an unproductive commercial property into a flourishing business. Make sure to discuss with a competent agency in order to have a good outcome, and get rid of some serious headaches. You will definitely receive all the guidance and assistance necessary in the process.