With Tax Day almost upon us, property investors are being urged to ensure that they are making the most of long-term tax-saving strategies.
Florida-based commercial real estate advisor Income Realty Advisors has proposed a tax-saving strategy for high net worth investors who currently own real estate: if an investment property is located in a high tax state, consider selling and reinvesting in Florida, where there is no personal income tax, using a 1031 exchange.
President of Income Realty Advisors, Patrick Moorton, has advised investors that now is the ideal time to assert this long-term tax-saving investment strategy before Tax Day on April 15th 2013.
Mr Moorton stated: "Seasoned investors are selling income producing properties in high tax states like California, New York and New Jersey, and reinvesting in Florida using IRS Section 1031 exchanges to defer federal income tax and tap into Florida's investor friendly personal state income tax rate: zero."
The 1031 exchange, or tax deferred exchange as it is otherwise known, allows investors with a high net worth to reinvest in 'like kind' properties and thereby defer federal income taxes. By selling an existing investment property in a high tax state and reinvesting in Florida, the state tax savings accrued can prove substantial and be a wise move for the savvy investor.
Properties that are net leased by a single national credit-worthy tenant are deemed favorable; this is an alternative investment option favored by real estate investment trusts, insurance companies, and high net worth individuals. Mr Moorton confirmed: "Net leased properties are a powerful tool for creating and preserving wealth long term."
For those investors pursuing a passive, steady cash flow whereby the tenant is responsible for all or most of the expenses, reinvesting in net leased property in Florida is ideal.
