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HOW 1031 TAX DEFERRED EXCHANGES MAY HELP STRENGTHEN YOUR POSITION

Also known as a "Delayed Exchange" or "Starker Exchange", you may find the good old "1031 tax Deferred Exchange" to be a good friend if you are faced with disposal of INCOME PROPERTY or INVESTMENT PROPERTY!  WHY?....cause these exchanges may allow you to DEFER all that Capitol Gains TAX that you will be on the hook for if you sell that property through normal channels!

WHY TAX DEFERRED EXCHANGES?
    1.  Allows Investors to DEFER capitol gains tax and use the increased equity to purchase a larger property or properties.
    2.  Investors may be spending more than they like maintaining properties..They can exchange several properties into one!
    3.  Investors may wish to diversify and exchange a property into another city or state.
    4.  An Investor may wish to exchange out of one property that has a lot of equity for several smaller properties.
         If down the road the investor wants to sell off some of the smaller properties, the tax burden would be SIGNIFICANTLY LESS.

    5.  Investors may wish to take advantage of increased growth and appreciation in a specific area.

WHAT IS "LIKE KIND" PROPERTY?

You have heard that investors are allowed to exchange for "LIKE KIND" property but MOST people do NOT know what this means.

To qualify as "LIKE KIND", any type of real property "HELD FOR INVESTMENT OR PRODUCTIVE USE IN A TRADE OR BUSINESS may be exchanged for ANY OTHER type of real property to be held for investment or held for productive use in a trade or business.

If we study the above paragraph carefully, we can easily see how we ARE allowed to exchange that Rental House, for a speculative land investment, or perhaps exchange that piece of raw land we've had for the last 20 years for a small commercial center, or investment houses or whatever.....as long as the parcels meet the definition of LIKE KIND as given above!

SO....HOW DO WE DO A 1031 TAX DEFERRED EXCHANGE?

There are several steps that should be followed during the exchange process.

        1.   CONSULT with your tax and financial advisors to determine of a tax deferred exchange is appropriate for your circumstances and compatible with your investment goals.

        2.   LISTING the relinquished property (the one you want to get rid of), with a good Real Estate Broker (Coldwell Banker Success Southwest) who is familiar with the exchange process.

        3.   OFFER, COUNTER OFFER AND ACCEPTANCE.  Your enter into a contract to sell with a buyer.  The buyer is advised of the exchange.

        4.   OPEN ESCROW AND COORDINATE WITH A FACILITATOR - Earnest money deposits when you sell the old property go to an ESCROW COMPANY.  The EXCHANGE FACILITATOR, a separate company who will do the actual exchange, prepares the exchange agreement and the necessary paperwork coordinates with the Escrow holder.  The sale is closed and the proceeds go to the FACILITATOR.  You are NEVER allowed to have "Constructive USE of the funds derived from a property to be exchanged, except in cases of (taxable BOOT.  This completes phase 1 of a normal tax deferred exchange.

       5.   REPLACEMENT PROPERTY IDENTIFICATION -  You have 45 days after you close escrow on your old property (Relinquished Property) in order to IDENTIFY the replacement property.  The identification must be in writing and signed by the exchanger.

        6.   BUYING THE REPLACEMENT PROPERTY - You have 180 days from the date you close on the old property to find and close on the replacement property.  Warren and Dorene Anderson or a Realtor in your area who is familiar with the exchange process will be happy to help you find just the replacement property that will fit your investment needs.   The purchase contract is substantially the same as a normal contract with a few additional clauses to help insure that your exchange will be valid.

        7.  OPEN ESCROW AND CLOSING THE EXCHANGE -  The Facilitator prepares the Phase 2 Exchange Documents and coordinates with the Replacement property Escrow holder.  At the direction of the Facilitator, the escrow holder deeds the replacement property from the Seller directly to the Exchanger (YOU).   The funds held in escrow by the facilitator are placed in escrow and the replacement property is purchased by the Facilitator from the Seller.  The transaction is closed as Phase 2 of a delayed exchange.

I know this sounds complicated however it really is a normal procedure and is done every day by savvy investors.  Warren and Dorene can help you through these steps and we can even recommend a good Facilitator company for you.

Rio Rico ("rich river") is a planned community located in Santa Cruz County, 57 miles south of Tucson and 12 miles north of Mexico.  The community's 39,000 acres roll gently down the the Santa Rita Mountains through the San Cayetano Foothills westward to the Santa Cruz River.

The area around and including Rio Rico was once part of the Baca Float, a tract of approximately 100,000 acres granted by the U.S. Congress to the heirs of Luis Maria Baca as the results of an early, unclear grant from the Spanish government.  The community had its beginning in 1969 and has continued to grow at a steady pace with the influx of tenants to the Rio Rico South Industrial Park.

Rio Rico offers a broad range of community facilities including a park, a recreation center, children's playground, riding stables, one swimming pool, one 18 hole golf course, a little league baseball park, and several basketball, tennis, shuffleboard and racquetball courts.  The Rio Rico Shopping Plaza has a supermarket, two restaurants, a video store, flower and gift shop travel agency, insurance center, and a beauty salon.  Rio Rico also has a new Senior Citizens Center.

Tubac was established in 1752 by Father Kino and is the second oldest European settlement west of the Mississippi.  It has been home to seven flags and five cultures.
    According to archeologists and anthropologists, people of many cultures have dwelt along the Santa Cruz River for perhaps 10,000 years.  The Hohokam were probably here between 300 and 1400-1500 A.D.  The Ootam (Pima and Papagos) arrived sometime in the 1500's.   The Spanish arrived with Father Kino in 1691. The Mexicans took over with their independence in 1821, and only since 1853 has Tubac been part of the United States, thanks to the Gadsden Purchase.  At the time of the Gadsden Purchase, Tubac was a ghost town of adobe ruins, but soon exploration and the discovery of ancient mines and minerals brought prospectors, mining companies, storekeepers, travelers and journalists to the boomtown of Tubac.

    Tubac's claim to FIRSTS in Arizona includes being the first European settlement, having the first school, the first newspaper, the first Spanish land grant, and the state's first State Park.

    Today Tubac boasts a sophisticated lifestyle, with culture events, historic reenactments and performances and studios, as well as a bird sanctuary and Spanish Colonial archaeological site.

         TUBAC ...TODAY ...is an interesting art colony as well as a delightful and safe place in which to live.  Clean, clear air ...Blue skies ...Open vistas ...Magnificent mountains ...A quiet world ...Quaint shops and restaurants ...Small-town ambiance ...Golfing, riding, exploring mountains and valleys.

            TUBAC is located along I-19, is 40 miles south of Tucson and 24 miles north of Nogales.  At an elevation of 3400 feet, Tubac enjoys mild winters and summers with cool evenings

Sahuarita was incorporated in September 1994. The town encompasses a 29 square-mile area. Sharing a southern border with Green valley, the area offers direct access to Tucson and Mexico via Interstate 19.  Surrounded by majestic mountain ranges Sahuarita has a growing number of family residential areas in a semi-rural setting as well as three master-planned communities (Rancho Sahuarita, Quail Creek and Madera Highlands). For FREE information on any of these communities or surrounding areas,  feel free to call us at 800-256-6484.

The town's educational facilities include a Elementary school, Middle school and a High school, all part of the Sahuarita School District.

Established in March 1964, Green Valley is an unincorporated adult retirement community located 25 miles south of Tucson along I-19. Located in the fertile Santa Cruz River Valley at an elevation of 2,900 ft. Green Valley is approximately 8 miles long and 2 miles wide.

Because of its retirement orientation, Green Valley is not dependent on any one source of income. It's economy is fueled by transfer payments, Social Security, dividends, savings withdrawals and retirement benefits.

Major employers in the area include the nearby copper mines, Caterpillar Tractor, FICO, builders and local service facilities.

  Financial Institutions

There are seven banks and six stock seven brokerage firms.

 Transportation

Highways: Interstate 19 (US 89) with emergency roadside phone service available

Airport: Tucson International Airport located 23 miles north in Tucson with shuttle service to and from Green Valley

UTILITY AND SERVICE COMPANIES

Water: Community Water Co. 520-625-8409

Las Quintas Serenas                 520-625-8040

Green Valley Water Co.            520-625-9112

Farmers Water                           520-791-2852

ELECTRIC

Tucson Electric Power Co.          520-623-7711

Trico Electric Coop                      520-744-2944

  Government Services

Local: County Board of Supervisors Office, includes a library, justice court and other governmental services, all conveniently located at 601 N. La Canada Drive.

Green Valley Community Coordinating Council, Inc. at 101-14B S. La Canada Drive: A cooperative governing board of the local homeowners associations that govern Green Valley.

Police: Pima County Sheriff's Department Substation, manned with twenty deputies and fifty five Sheriff's Auxiliary Volunteers (SAV).

Fire: Green Valley Fire District contract with Rural Metro Fire Protection Company for fire, ambulance and paramedic services with three stations locations: 555N. La Canada Drive , 3005 S. Camino del Sol and 210 East Continental Road.

 Housing and Rentals

Home saleprices for 2001 ranged from $32,000 to $900,000.

In the area: One mobile home community and two RV Parks.

Rentals: $400 and up for an unfurnished unit on an annual basis. $1450 and up for a furnished unit on a peak (winter) seasonal basis.

 Population

Greater Green Valley Area: Continental, Curly Horn Ranch, Elephant Head, Madera Canyon, McGee Ranch, Montana Vista, Ocotillo Ranch, Sahuarita, SantoTomas, Valle Verde del Norte, Wrangler Ranch

Links:

Evangelical Free Church of Green Valley:  E mail: GVPrayer@aol.com

GreenValley Baptist Church-e mail: gvbcarizona@aol.com

Green Valley Community Church- www.gvnews.com/gvcc.html

Valley Presbyterian Church:  www.valleypresbyterian.net

Desert Hills Lutheran Church:E mail:  DHLC1@mindspring.com

Lutheran Church of Risen Savior: www.risen-savior.org

Saint Francis in the Valley-Episcopal Church: www.stfrancisgv.org

Our Lady of the Valley:  aovrecp@aol.com

RENTALS

We can offer you some very good  rentals for your vacation or to have while your new home is being built.

To get an appointment to see these homes please call Warren or Dorene at 800-256-6484

This home is unfurnished and no pets .  It is a  new home and includes all the amenities of the Rancho Sahuarita recreation areas. Including a lake, water park, fitness room, teen room, sports bar, party room, etc. and also all the amenities of the Del Web recreation center for 55+.

This home is perfect for you if you are wating for a home to be built then you do not need to put your things in storage.