Long Island Business News quoted Tax Partner Peter Buell in an article about 1031 exchanges and the recovering real estate market.
Long Island Business News
By Bernadette Starzee
As the real estate market has strengthened, Long Island accountants find themselves working on more Section 1031 exchanges.
When taxpayers sell real property at a gain, they generally have to pay capital gains taxes. But if they exchange one commercial property for a “like-kind” property under Section 1031 of the tax code, they can defer gains taxes and build wealth.
“As the market has improved, the amount of gain people are realizing or have the potential to realize on a transaction is rising,” making a 1031 exchange more appealing, said Peter Buell, a tax partner in the real estate group at Marcum, which has offices in Melville.
For instance, Buell has a client who acquired a building in Nassau County for $11 million that is now worth $36 million. Faced with paying $25 million in gains taxes, the company chose to do a like-kind exchange and buy multiple properties, in addition to funding a private foundation that will shelter part of the gain.
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