1031 Exchanges for Real Property
Under Section 1031 of the Internal Revenue Code, owners of real estate held for investment or use in a trade or business can swap their property tax-free for “like-kind” real estate. Exchanges are made for people wanting to stay invested in real estate, increase their leverage and avoid paying hefty taxes upon the sale of property.
The capital gains deferral period is 180 days. During the deferral period, the proceeds of the sale are placed with a Qualified Intermediary. To quality for deferral, strict adherence to the provision is necessary. Therefore, it is critical to select a Qualified Intermediary that has a thorough understanding of all the details of the regulations and specializes in this type of transaction.
We have first-hand experience with 1031 exchange procedures and can find properties that will work for your exchange process and time frame. We can also help you locate Qualified Intermediary firms, and of course a search on the Internet will generate many options for 1031 Exchange Intermediaries.
Like Kind Investment Real Estate
- Apartments
- Rental Homes
- Retail Properties
- Commercial
- Raw Land
- Office Buildings
- Industrial
- Ranches
So for example, a person can exchange raw land for an apartment building, or vice-versa. For a short course on the 1031 process, which properties qualify, the pros and cons and much more, click here to view the First American Exchange Company‘s tutorial, which is an excellent resource, complete with examples and scenarios.
