Tax Deferred Exchanges

A tax-deferred exchange is a legal process of deferring capital gains when purchasing property and reducing or eliminating taxes on the sale of an existing property.

This is one of the techniques commonly used by real estate investors on Hilton Head Island to limit their tax exposure and reduce the cost of buying island real estate. It’s highly effective and can provide considerable savings.

Here’s how it works: you buy a new property on Hilton Head Island or the surrounding area and sell a property, a rental property, for example, in another state or area. As long as the properties are considered “like-kind,” then taxes can be deferred (meaning put off to a later date, maybe forever).

Taxes are often one of the things that are overlooked when considering the price of a new property. It can be an unpleasant shock to see a massive capital gains tax bill. Using a Tax Deferred Exchange (TDE) to buy a new home or condo on Hilton Head Island can be a great way to reduce a substantial tax burden with the added benefit of gaining a beautiful home or condo on this island paradise.

The Realtors at the Dunes Marketing Group can help walk you through the process, including recommending a list of experienced local attorneys and financial consultants. 

The Federation of Exchange Accommodators' professional association website
1031 Exchange FAQ's (Federation of Exchange Accommodators)