Like Kind Exchanges, also known as tax deferred exchanges, are defined by Internal Revenue Code (IRC) section 1031. A 1031 Tax Deferred Exchange offers taxpayers one of the last great opportunities to build wealth and save taxes. By completing a 1031 Exchange, the Taxpayer (“Exchanger”) can dispose of investment or business-use assets, acquire replacement property and defer the tax that would ordinarily be due upon the sale.
Since 1921, section 1031 has permitted a taxpayer to exchange business-use or investment assets for other like-kind business use or investment assets without recognizing taxable gain on the sale of the old assets. The taxes which otherwise would have been due from the sale are thus deferred.
A 1031 Exchange allows investors to defer Federal capital gains tax, state ordinary income tax, net investment income tax, and depreciation recapture on the sale of Investment property if certain criteria are met including:
Buy replacement property for equal or greater than sold for and reinvest all proceeds
Identify replacement property within 45 days of close of sale
Purchase replacement property within 180 days of close of sale
Must Sell and Buy property that is considered “like-kind” to each other
Process must be handled by a Qualified Intermediary (QI)....
CLICK HERE TO READ MORE AT IPX1031 EXCHANGE WEBSITE
CLICK HERE TO WATCH A VIDEO ABOUT 1031 EXCHANGES
For additional information reach out to your 1031 Exchange agent or:
Theresa A. Quartaro Assistant Vice President | Account Executive
Investment Property Exchange Services, Inc. (IPX1031)
1900 West Loop South, Suite 100 • Houston, TX 77027
m: 832.740.0260 la: 504.235.1027 tf: 888-337-1031 ext.5