888-433-5426
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Tax free exchanges (1031)If you are selling equipment for capital gain, you may be eligible to defer taxes by using a 1031 exchange (Internal Revenue Code §1031), also known as a "Tax Free" exchange. Through a Tax Free exchange, you can save thousands of dollars in income taxes when selling a piece of equipment and buying another, similar piece of equipment. Normally, a construction equipment owner would pay federal income tax on the gain from selling a piece of equipment. For example, a taxpayer in a 30% tax bracket selling a piece of equipment for a $20,000 gain would owe approximately $4,500 in federal income taxes on that sale. Without a Tax Free exchange, this taxpayer would now have only $15,500 in their pocket to apply to the purchase of another piece of equipment. With the tax-deferred exchange, however, a construction equipment owner can defer ALL federal income taxes on the sale of a piece of their equipment when they buy a similar piece of equipment within a specific time period and when they use a Qualified Intermediary. To find out if you can have more cash available to invest in replacement equipment by qualifying for a Tax Free exchange, you can:
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1-888-433-5426