1031 Exchange

1031 Like-Kind-Exchange

Section 1031 of the Internal Revenue Code allows an owner of Investment Property to exchange property and defer paying Federal and State capital gain taxes (currently 15% Federal, depreciation recapture & applicable State taxes) if they purchase a “like-kind” property following the rules and regulations of the Internal Revenue Code.  

The 5 Benefits of a 1031 Exchange:

  • Preservation of Equity
  • Leverage, or Stair-step growth
  • Diversification
  • Management Relief
  • Estate Planning
 

There are Six Basic Rules of 1031 Exchanges:

  1. Held for Investment
  2. 180 Day Rule
  3. Qualified Intermediary
  4. 45 Day Identification Rule
  5. Title Requirements
  6. Reinvestment Requirements or “the Equal or Up Rule”