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1031 Exchange Analysis
811 W 7th St, Los Angeles, CA 90017
Presented by Jake Glaser, Lyon Stahl
Estimated taxes
Sell for
$10,575,000
Tax Savings
$3,537,594
Deferred with a 1031 exchange
| Traditional Sale | 1031 Exchange | |
|---|---|---|
| Cost Basis | $1,200,000 | $1,200,000 |
| Gain on Sale | $9,375,000 | $9,375,000 |
| Depreciation Recapture (25%) | $297,345 | $0 |
| Federal Capital Gains Tax (20%) | $1,637,124 | $0 |
| CA State Tax (13.3%) | $1,246,875 | $0 |
| Net Investment Income Tax (3.8%) | $356,250 | $0 |
| Total Tax (37.7%) | $3,537,594 | $0 |
1031 Reinvestment Options
Retail
Office
Industrial
SFR Rental
Multifamily
Hotel
Land| Max Purchasing Power | $10,046,250 |
| Annual Cash Flow | $567,960 |
| Down Payment | 90.0% |
| Estimated Transaction Costs | 5.0% |
| Cap Rate | 6.4% |
Strategy
Invest in retail centers with strong anchor tenants to secure stable cash flow.
Advantages
- Stable income from long-term tenant leases
- Tenant diversity reduces vacancy and income risks
- Rent escalations offer protection against inflation
Risks & Downsides
- Shift towards e-commerce may reduce demand
- Vacancy rates can increase during economic downturns
- Retail is sensitive to consumer confidence and spending habits
1031 Exchange vs Taxable Sale
1031 Exchange
Pay taxes and invest proceeds in S&P 500
In 5 years, you'll earn $4,393,838 more with a 1031 Exchange.
1031 Exchange
Reinvest in Retail
| Transaction Costs | 6.0% |
| Estimated Tax Rate | 0.0% |
| Cap Rate | 6.4% |
| Total Cash Flow | $2,839,800 |
| Equity Value in 5 Years | $12,199,768 |
Traditional Sale
Pay Tax and Invest Proceeds
| Transaction Costs | 5.0% |
| Estimated Tax Rate | 33.5% |
| Rate of Return | 7.2% |
| Total Cash Flow | $0 |
| Equity Value in 5 Years | $7,805,930 |
Personalized Rules for 811 W 7th St, Los Angeles, CA 90017
REPLACEMENT LOAN
Replace $1,000,000+ Loan to defer all gains
REPLACEMENT PROPERTY VALUE
Buy $10,575,000+ property to defer all gains
WORK WITH A QUALIFIED INTERMEDIARY
Sale proceeds must go to an intermediary
TIMELINE
Identify within 45 days; Close within 180 days
Defer an estimated $3,537,594 tax bill with a 1031 exchange
The No Fee 1031 Exchange
Deferred is a trusted Qualified Intermediary that charges $0 forward exchange fees.
Enjoy a secure and seamless 1031 process designed to help you earn more, not pay more.
7,000+
Exchanges Completed
100+ Years
Team Experience
7,000+
Exchanges Completed
100+ Years
Team Experience
