Starker Exchange is the other name for 1031 Exchange and it is one of the best strategies financial experts use in tax deferment. The real estate industry is no longer in a bubble as it was taken to be a decade ago and that is why many people who invested in it are opting to exchange some of what they own in this industry for properties located in different parts of the country which will bring in more cash. The large part of the population is not aware of this and that is why many people have not taken advantage of the situation.
People who sell investment properties are not required to pay capital gain tax under section 1031 of the IRS Code provided they can demonstrate the money gotten from the sale was used to invest in another property along the same line. For this to be simple, you should take it to mean a swap. Nevertheless, there are a number of elements which ought to be demonstrated before this can be taken as true. 1031 exchange came into being first with the providence that the sell of your old property and investment in the new one took place within 24hours. However, this is no longer common now because chances are both the seller and buyer will be interested in the properties in question.
Delayed exchange also holds in eyes of the law whereby the seller has a window period of 180 days or months to get a similar property to invest in. It is common with many investors today because it is more than enough time to find the right property. If the property you have currently cannot amount to the money you spend in buying it, you will benefit from selling. Besides this, if your property value has increased since the purchase, selling it for the new one means getting a better deal.
Reverse exchange is allowed in the 103 exchange and allows people who do not have enough money for investment to pay for them later. The only problem is that many lenders are reluctant to issue money for such an investment because your name cannot be on the title deed of the new as well as sold property. You can go around this by creating LLC for the replacement property ownership until the old once is relinquished and then you can take over the ownership. You may not always find a new property at the value of the old one. To avoid taxes, you can go for improvement exchange which is also allowed in 103 Exchange.