1031 Exchange – What you need to know
Posted by Alex Neir on Wednesday, September 18, 2013 at 7:14 AM
By Alex Neir / September 18, 2013
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A 1031 exchange allows you to defer the capital gains tax due on the sale of a piece of real property by rolling the gain into any other type of real property. A qualified intermediary must complete the 1031 exchange and there are very specific rules that must be adhered to.
The total capital gains tax calculation as of 2013:
- Taxation on depreciation recapture at 25%
- Federal capital gains taxes at 20% (or 15%)
- 3.8% Medicare surcharge tax on net investment income
- State tax rate (0% - 13.3%)
Medicare and Federal Capital Gains tax depend on your taxable income
|
Single |
Married |
Cap Gains |
Medicare |
Combined Rate |
|
$0 - $36,250 |
0 - $72,500 |
0% |
0% |
0% |
|
$36,251 - $200,000 |
$72,501 - $250,000 |
15% |
0% |
15% |
|
$200,001 - $400,000 |
$250,001 - $450,000 |
15% |
3.8% |
18.8% | ...