1031 Property Exchange Explained

1031 Property Exchange Explained

Irs Section 1031 allows a property investor of investment income property to exchange income property and defer paying federal and state capital gain taxes (20%+ applicable state taxes) in the event that they purchase a like-kind income property. A tax-deferred exchange is a method by which a property investor trades one or more relinquished income properties for one or more replacement income properties of like-kind, while deferring the payment of federal income taxes and some state taxes on the transaction. 1031 Property Exchanges are typical sales and purchases that involve the same exact ingredients as any other sale or purchase, without the capital gains. The only real difference is the property investor is increasing his or her selling and buying power by electing to rollover their investment into another like kind 1031 property. No other aspects of the transaction are affected.

Contact us if you are interested in retaining the wealth of your income property investment and we will match you with a qualified 1031 property broker in your area.