There are several rules to note for a 1031 exchange, such as it can only be used for business property or property for investments, nothing personal, Forbes states. Another important rule is that 1031 exchanges are very broad in terms of what two items can be exchanged, such as apartments for land.
A 1031 tax exchange provides exceptions and tax deferments for like-kind exchanges, which refer to the process of swapping one business or investment asset for another. The rules and regulations associated with these transactions are outlined under IRC Code Section 1031.
There is no direct method of making money through a 1031 exchange, but this type of exchange offers deferral of taxes, increased cash flow for reinvestment, and wealth and asset accumulation, reports The Huffington Post. Property owners can take advantage of a 1031 exchange when selling qualified pr
Exchanges under Internal Revenue Code Section 1031, also known as like-kind exchanges, must involve business or investment property to qualify for a tax deferment, reports the IRS. Like-kind exchanges of unequal value may involve taxable gain. The IRS has specific timelines for the completion of 103
The main benefit of a section 1031 exchange is the postponement of capital gains tax. The 1031, or like-kind, exchange is a swap of property for similar property, sometimes including unlike property or cash. The Internal Revenue Service imposes strict rules on these transactions, according to Cooney
Tips for a 1031 like-kind exchange involve using only for investment or business property, performing a delayed exchange, designating replacement property, and closing within six months, reports the Forbes website. The Internal Revenue Code section 1031 provides more information on the terms of an e
As of 2015, property sellers using the Like-Kind Section 1031 Exchange must identify potential replacement properties within 45 calendar days of closing on the relinquished property, according to the U.S. Internal Revenue Service. They must complete closing on replacement properties within 180 calen
Investors who own shares in a real estate investment trust cannot participate in a 1031 exchange for commercial property, according to Exeter. REIT shares are treated as personal property under U.S. tax laws, and 1031 property exchanges require a direct interest in properties, as of 2015.
Property investors may be able to defer paying taxes by doing a 1031 exchange. Learn the basics of swapping like-kind property. James O'Neil/Stone/Getty Images Property investors make money through rental income or by selling property. Any gains are subject to being taxed. One loophole property inve
This calculator will help you to determine how much tax deferment you can realize by performing a 1031 tax exchange instead of a taxable sale. 1031 tax-deferred swaps allow real estate investors to defer paying capital gains taxes when they sell a property that is used "for productive use in a trade