Description: Advance, contingent loan commitments to prospective sellers of capital assets (commercial real property, residences, mineral rights, partnership interests, corporate stock, professional practices, art collections, and so on) to lend to them an amount of money that will equal or exceed the tax cost of selling the asset.
credit (1704) idaho (1546) boise (754) nampa (169) marigold (35) southern idaho (18) marigold credit (1)
Everyone who considers selling a property wants to minimize the tax cost of doing so.
In today's market conditions, however, the usual way of postponing or reducing the tax – through a tax-deferred exchange under Section 1031 of the Internal Revenue Code – isn't working as well as it once did.
A fully tax-deferred exchange requires that you maintain or increase the amount of debt when you acquire a replacement property, but market values and expected debt service coverage for the replacement property may be inadequate for the amount of debt needed.