Our Tuesday Tip is an important one – especially now. While 1031 CORP. has always suggested you discuss your situation with a tax advisor to determine the best you to proceed, that suggestion is more important than ever now that the tax rates have changed. Completing a 1031 tax-deferred exchange can defer the capital gains and 3.8% Medicare Tax as well as the depreciation recapture but now exchanges can help keep you out of the 20% capital gains and dividend tax brackets and the new 39.6% income tax bracket. Exchanges can also help avoid the personal exemption phase out and the Pease Tax. (Summary of new tax bill)
Happy New Year! On this Wealth Building Wednesday and for the rest of this week, we will look at the bill approved by Congress to avert the “Fiscal Cliff” and what it means to taxpayers, especially those who complete 1031 tax-deferred exchanges.