IRS 1031 Exchanges

A 1031 Exchange, also known as a “like-kind” exchange, is the process of exchanging one property for another in order to defer capital gains taxes. IRC Section §1031 allows an individual to sell an investment property and reinvest the proceeds from the sale into a new like-kind property without paying capital gains taxes, as long as the new property meets the requirements outlined by the IRS. There are a few reasons why an investor may be considering a 1031 exchange, but the most significant is the capital gains tax deferral.

A 1031 exchange is a useful strategy for an investor; however, there are many regulations that must be observed in a 1031 exchange transaction. If the IRS’ 1031 Exchange rules aren’t followed, investors will be liable for capital gains taxes. Due to the complexity of these transactions, it's highly recommended to consult a professional. If you have questions about a 1031 exchange or you’re ready to start the process, give us a call. In addition to many years of real estate experience and an extremely knowledgeable team of attorneys, Exchange Properties is skilled in the area of 1031 Exchanges. We will help guide you through the process from start to finish, making it as easy as possible on you.