1031 Exchanges

What are 1031 Exchanges?

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Section 1031 exchanges are swaps of one investment or business real estate asset for another of similar nature.

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What are the advantages of 1031 Exchanges?

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As long as the Section 1031 exchange requirements are met, 1031 exchanges are not taxable at the time of the exchange/sale. Instead, taxpayers “defer” the gain realized on an exchange, thereby delaying the taxable sale until the new property is ultimately sold for cash.

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Who qualifies & why should you adopt?

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Any owner of investment or business-use real estate with the intent to dispose, sell, or trade these assets would qualify and should consider adopting. Executing the 1031 Exchange strategy properly allows owners to delay tax to future years. Although the tax is still inevitable, reducing the present tax burden allows owners to maximize current cash inflow.

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1031 Exchange transactions can be complex and require the investor to meet various criteria to obtain the tax benefits. Be sure to consult with your tax and/or wealth advisors prior to pursuing a 1031 Exchange.