Have you ever heard of a 1031 exchange? Watch as I work with clients Ron and Judy on their 1031 exchange! And read below to learn more about the process
A 1031 exchange is a tax-deferred exchange of investment or business properties. It allows investors to sell an investment or business property and reinvest the proceeds from the sale into a new investment or business property, without having to pay capital gains taxes on the transaction.
The 1031 exchange is named after Section 1031 of the US Internal Revenue Code, which provides for the tax-deferred exchange of property held for investment or business purposes.
In order to qualify for a 1031 exchange, both the property being sold (the “relinquished property”) and the property being purchased (the “replacement property”) must be held for investment or business purposes. In addition, the exchange must be completed within a certain time frame and must meet a number of other requirements.
If you’re thinking about selling an investment or business property, a 1031 exchange may be a good option for you. It can help you defer capital gains taxes on the sale, and reinvest the proceeds into a new property. But it’s important to understand the requirements and restrictions of a 1031 exchange before you decide to go ahead with one.
If you have any questions about 1031 exchanges, or if you need help finding a replacement property, please contact us. We’re here to help!