Using Technology to Invest in Your Future!

A 1031 Exchange is a way of structuring the sale of certain kinds of property so that your profit or gain is not currently taxed. Instead, the property that is sold is replaced with another “like kind” property. If the transaction is properly structured, your profit or gain is deferred to a future date.

Section 1031 of the Internal Revenue Code, 26 U.S.C. § 1031, provides:

"No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment."  

There are specific guidelines you must adhere to in order for you to have a qualified exchange.

1. Must be like kind property, such as real estate for real estate, or business for business.
2. Must use a qualified intermediary.
3. Must identify replacement property within 45 days from close of escrow on initial property.
4. Must complete exchange within 180 days from close of escrow on initial property. 
5. Cannot take out any cash (called a boot which will be taxed).

Here are some flyers you can print for more information in doing a 1031 Tax Deferred Exchange: