1031 exchanges can be simplified by working with the right people and accessing the right properties

1031 exchanges in a tough market can be simplified by working with the right people and having access to the right properties. The real estate market has experienced dramatic changes in the last six months. Today, the credit of your tenant and the location of your property are paramount. With the increasing risks in the economy, having a tenant with a high credit rating is almost like having an insurance policy against collections and vacancy. In addition to the credit of your existing tenant, it is important for you to own a property in a strong demographic location. Properties that are well located will be much easier to re-tenant when your current tenant eventually moves out. Here's the good news. The investment property you own has most likely appreciated at a faster pace than you initially predicted. The market for investment properties is still strong and you should be able to find a buyer for your property. Here's the bad news. Large profit means large taxes. You must pay a federal capital gains tax when you sell your property. In addition, most states require you to pay a state capital gains tax. Last but not least, you will owe a recapture tax representing 25% of every dollar you depreciated. The U.S. Government loves when you sell property. Here's the solution to your tax problem. The U.S. Government allows you to defer 100% of your federal and recapture taxes when you properly utilize a 1031 exchange. Most states also allow you to defer state capital gains tax. Real estate investors throughout the U.S. commonly use 1031 exchanges. If you want to defer taxes from the sale of your property, a 1031 exchange is a smart choice. Please visit www.1031tax.com to learn how J.P. Morgan Property Exchange, Inc. can coordinate your 1031 exchange. Now that you know about 1031 exchanges, you must determine the type of property to exchange into. 1031tax.com specializes in selling single-tenant triple net leased properties (NNN properties) with long-term corporately guaranteed leases (15-25 years plus options) from national tenants with multi-billion dollar market caps. The tenant in a NNN property is responsible for all maintenance, taxes and insurance. Tenants include Walgreens, CVS, AutoZone, Advance Auto Parts, Wal-Mart, Home Depot, etc. 1031tax.com also sells multi-tenant properties which include shopping centers, industrial, office and apartment buildings. Shopping centers can be unanchored, anchored by a large national tenant, or shadow anchored. Shadow anchored centers are especially desired by national tenants who only need 1,500 to 6,000 s/f. Tenants flock to shadow centers because of the retail synergy, full parking lots and immediate proximity to an anchor such as a grocery store, Wal-Mart, Target, Home Depot, Kohl's, etc. Our office and industrial buildings often have strong credit tenants and are located in markets with very strong demographics. Our apartment buildings normally have very high occupancy and are located in very strong demographic markets. Alan Fruitman is the president and managing broker at 1031tax.com, Denver, Co.