US National 1031 Exchange provides qualified intermediary services to help investors defer capital gains taxes when selling investment properties and purchasing replacement properties using 1031 exchanges. It has over 30 years of experience handling thousands of exchange transactions. The summary outlines the key benefits of 1031 exchanges, including increasing cash flow, trading in fully depreciated properties, and property relocation. It also highlights US National's focus on exchanges, expertise, and stability as part of the Realogy family of companies.

1. Your Guide to the
1031 Exchange
US National 1031 Exchange
www.USNational1031.com
877-671-1031

2. Introduction
US National 1031 Exchange has a long history of providing
Qualified Intermediary Services. Since 1979 we have been
assisting investors to achieve their goals and build wealth.
US National 1031 Exchange is part of Title Resource Group,
a Realogy company.
US National 1031 Exchange has accomplished thousands of tax
deferred exchange transactions in its 30 year history. Whether your
transaction is a multi-million dollar office complex or single family rental
unit, we are here to provide you with highest level of experience and
security of funds.
This booklet is designed to give you a brief overview of the benefits
and mechanics of a 1031 Exchange. The subject matter is vast and
sometimes complex. We invite you to call our toll free number so
we can better understand your individual situation.
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877 - 671- 1031

3. What is a 1031 Exchange
Internal Revenue Code, Title 26, Section 1031 is the
statute dealing with the deferment of capital gains
tax on the sale of real property, and in some instances
personal property.
“No gain or loss shall be recognized on the exchange of property
held for productive use in a trade or business or for investment,
if such property is exchanged soley for property of a like-kind which
is to be held either for productive use in trade or business or investment”
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4. The Power of an Exchange
Many investors and real estate professionals have confusion over
the like - kind requirement and what it means.
Like - kind means exchanging an investment property for investment
property. For example, raw land for a strip mall or an apartment building
or five single family rental homes.
The like - kind requirements create flexibility for the investor to diversify
their holdings, creating an opportunity to expand and grow your
wealth.
Top Reasons to Exchange
Increase Cash Flow
Trade In Fully Depreciated Property
Property Relocation
Consolidation
Expansion
For every dollar of tax deferred your buying power
is increased four times.
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5. US National 1031 Advantage
Stability
Financial stability - We are part of the Realogy family of companies.
Our adherence to the strictest accounting and financial
methodologies is a precept of how we do business
Protection
We are properly bonded and insured to provide full circle protection
for your clients funds
Focus
Exchanges are what we do, this is our only profession. We are not
distracted by other businesses that could inhibit your transaction
Expertise
Our exchange professionals are here to guide you through the
transaction whether commercial or residential they will coordinate
,
and expedite your requests with accuracy and diligence. We have
routinely handled rush exchanges or last minute exchanges
at settlement
History
Our foundations were built in real estate and as such our focus is
to cater to the real estate investor and professional. We have been
operating since 1979 and have a full staff of experts available to
handle your exchange needs
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6. Capital Gains Calculation
Capital Gains is NOT equity. In fact it is possible to
have a capital gain with no equity in a property.
Upon your decision to sell any investment property it is
paramount to speak with your tax advisor. Your tax
advisor will determine your exact tax liability for the
property(s) in question.
Capital Gain Calculation
ADJUSTED COST BASIS
Original Purchase Price $240,000
plus Improvements $15,000
minus Depreciation $30,000
= Adjusted Cost Basis $225,000
CAPITAL GAIN
Sales Price $400,000
minus Net Adjusted Basis $225,000
minus Cost of Sale $28,000
= Capital Gain $147,000
CAPITAL GAIN TAX
Recaptured Depreciation (25%) $7,500
Federal Capital Gain (15%)s $17,550
State Capital Gain $13,671
= Total Tax Due $38,721
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7. Exchange or Sell
Using the example from the previous page will
demonstrate the power of deferring capital gain taxes.
Sell Example
Sales Price $400,000
minus Cost of Sale $28,000
minus Loan Balances $225,000
= Gross Equity $147,000
minus Capital Gain Tax $38,721
Net Equity $108,279
With $108,279 available for downpayment your estimated purchasing
power for a new property is $433,000. This is assuming a 25%
downpayment on the new mortgage. If you employed the services of
US National 1031 Exchange your purchasing power would have been
$588,000 assuming you deferred your taxes and put down 25% on
the new mortgage.
Exchange Example
Sales Price $400,000
minus Cost of Sale $28,000
minus Loan Balances $225,000
= Gross Equity $147,000
minus Capital Gain Tax $0
Net Equity $147,000
Now ask yourself this question? Assuming your real estate investment
keeps up with inflation and appreciates at 3% per year which
property would you rather have owned? The property worth
$433,000 or the property worth $588,000. Over a 5 year period
appreciating at 3% the difference in value between an exchange sale
5
and tax sale is $174,000. This is how wealth is created.

8. Exchange Mechanics
The IRS has established specific timelines and identification
requirements needed to complete a 1031 Exchange.
Total Transaction Time - 180 days to purchase your replacement
property(s) after you have closed on your
relinquished property.
Identification Period - The first 45 days of your 180 day transaction
timeline is called the Identification Period.
After you close on your relinquished property
you have 45 days to idenitfy potential
replacement property(s). The IRS has three
requirements to identify potential replacement
property(s).
180 Days
45 Days
Identification Requirements
Three Property Rule - The Exchanger may identify three (3)
properties of any value
200% Rule - The Exchanger may identify any number of properties if
the total fair market value of what is identified does not exceed 200%
of the sale price of the relinquished property; or
95% Rule - If the Exchanger identifies more properties than are
permitted under the two rules above, the Exchanger must acquire
95% of what was identified.
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9. Step One
1. You may contact US National 1031 Exchange for a free
consultation at any time. You should have your Qualified
Intermediary in place and discussions with your tax advisor
prior to selling your property.
2. To open an exchange you may contact us at 877-671-1031 or you
may visit our website www.USNational1031.com and open your
exchange on-line.
You will need the following information:
a. Name and contact information
b. Real estate agent’s name and contact information
c. Subject property address
d. Contact information of your title/settlement,
attorney or escrow company.
Always contact your CPA, tax and/or legal advisor to discuss
your individual tax liability.
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10. Our Parent Company: Title Resource Group
Title Resource Group, a Realogy company, is a driving force in
the title and settlement services industry.
At TRG, we are national in scope, but locally staffed, with a
wealth of experience in settlement services. TRG provides
residential, commercial and timeshare title insurance, closing
management services, real estate closing services and private labeled
closing services for lender’s.
Member Federation of Exchange Accommodators
Fidelity Bonded and Insured
Certified Exchange Specialists on Staff
Visit www.USNational1031.com
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