1031 Exchange Overview

1031 Explained - 1031 Exchange Tax Deferment

1031 Exchange is a powerful tool for investors interested in deferring capital gains taxes on the sale of real property. Section 1031 of the Internal Revenue Tax Code allows an investor to make an exchange of the proceeds from the sale of business or investment property for "Like-Kind" property. When the reinvestment is secured within the guidelines of the 1031 Exchange Tax Law, the investor is legally able to put-off paying taxes on the capital gains on the relinquished property until such time as the replacement property is sold without such an exchange.

Beyond 1031 Real Estate Exchange

A popular tax deferment method for real estate investments and TIC / Tenancy in Common, many investors are taking advantage of the broad definition of "like-kind" property in the 1031 tax law and diversifying their portfolios with 1031 Exchange options beyond real estate. You can defer taxes while diversifying your portfolio with a variety of investment options, including livestock, land, restaurants and oil and gas royalties.

1031 Exchange Tax Law

The premise of 1031 Exchange Laws stems from the IRC 8824 which states that "Generally no gain or loss is recognized on the exchange of like-kind property." Learn more about 1031 Exchange Tax Law.

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1031 Exchange Tax Requirements

Requirements for effectuating the 1031 Exchange are as follows:

A " Qualified Intermediary" must process your exchange.

After selling a business or investment asset, you must exchange the proceeds for "like-kind" property.

The "replacement property" that you receive in the exchange must be properly identified.

You must give a 45 written notice to another party identifying the like-kind property you wish to receive in the 1031 Exchange.

The property must be purchased within the 45 day identification period.

You must receive the like-kind property from the selling party on or before the 180 days after you transferred the property given up in the exchange.

1031 Exchange Terms

Starker Trusts

Tax-Deferred Exchanges


1031 Exchange Options

1031 Tax Law Provisions
1031 Tenet in Common - TIC

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