What is a 1031 Exchange?

A properly structured 1031 Exchange allows an investor to sell a property, to reinvest the proceeds in a new property in order to defer capital Gain taxes. IRC Section 1031 States (

 States:

 

“IRC Section 1031 provides an exception and allows you to postpone paying tax on the gain if you reinvest the proceeds in similar property as part of a qualifying like-kind exchange. Gain deferred in a like-kind exchange under IRC Section 1031 is tax-deferred, but it is not tax-free.

The exchange can include like-kind property exclusively or it can include like-kind property along with cash, liabilities and property that are not like-kind. If you receive cash, relief from debt, or property that is not like-kind, however, you may trigger some taxable gain in the year of the exchange. There can be both deferred and recognized gain in the same transaction when a taxpayer exchanges for like-kind property for that of lesser value.”

 

1031 Exchanges protect investors from capital gain taxes in addition to allowing significant portfolio growth and return on investment. To make sure you unlock these benefits it is important that you have a comprehensive knowledge of the exchange process and a complete understanding of what the key term “like-kind property" means in relation to your transaction.

At Blue Latitude 1031X we work each transaction in a detailed and methodical way regardless of how simple or complex. Please give us a call to discuss you needs and get a price. Please call us at 917-648-6888 or email at Alevine@bluelatitudeconsulting.com 

 

Free consultation always available.

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