Now, we are not tax attorneys (nor do we play one on TV), but we’ve come across a few people who have sold rental property elsewhere in the country and are now looking to us here at Tidewater Custom Modular Homes to reinvest the realized gains here in rental property here in Hampton Roads.  If this is your intent, do you know that you can avoid paying federal capital gains tax on some or ALL of that profit?  

The process by which to do this is called a “Section 1031 Like Kind Exchange”.  Again, you must talk to a federal tax expert for the details, but simply put, you work the process through an intermediary who handles all the sale of your current and purchase of your future rental property.  Because you never actually take receipt of the profit on the sale of your old property (because this profit is directly transferred by the intermediary during the purchase of your new property),  federal tax law concludes you have not actually received a cash gain, YET that is.  Sometime in the future when you (or your heirs) sell this new rental property,  then the federal government will come calling you to pay tax on the gains.  

So rather than write a check to Uncle Sam this year, you can reinvest your hard earned money into a new modular home perfectly suited for rent.  Small low-cost ranch style modular homes such as "The Austin" or a cottage style modular home such as “The Ashton” can immediately put you into positive cash flow on your new custom modular rental home.  

For more information,  contact us today.