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What
is a 1031 Exchange?
Internal Revenue Code (IRC) Section 1031 is one of the
last remaining tax loopholes. It is a powerful tool that
allows investors to exchange any investment property for
any other investment property. For your exchange to be
valid, you must follow specific IRS regulations.
Here
is an abbreviated list of the regulations:
The properties being exchanged must be of like kind.
For example, you may exchange:
- A
house for another house (or several houses)
- A
house for commercial real estate land for rental property
- A
strip mall for an office building any investment property
for any other investment property (as long as it is
not occupied as your primary residence)
- You
must identify and close on your replacement property
within a specific period of time.
100% of the proceeds from your current property must
be held by a Qualified Intermediary and applied toward
your replacement property to get a full tax deferral.
- Your
replacement property must be of equal or greater value
to the property you have sold to get a full tax deferral.
- Properties
being exchanged must be used for investment. Personal
residences are not exchangeable
We
can guide you through the IRS's regulations, making
a 1031 exchange EASY, INEXPENSIVE, and SAFE.
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