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One critical issue in a like-kind exchange is defining "property of like kind." The tax code contains no such definition. Treasury Regulation § 1.1031(a)-1(b) offers a little guidance, suggesting that the term "like kind" refers to "the nature of character of the property and not to its grade or quality". But the regulation does not further ...
For real property exchanges under Section 1031, any property that is considered "real property" under the law of the state where the property is located will be considered "like-kind" so long as both the old and the new property are held by the owner for investment, or for active use in a trade or business, or for the production of income.
A 1031 exchange is a real estate transaction where you trade a business-use property or one held as an investment property for a "like kind" property.
An investor decides to sell investment property and do a 1031 exchange. He contacts a qualified intermediary (QI) and they enter into an agreement. The investment property is placed on the market. An offer to purchase the investment property is accepted and signed by the QI. Escrow for the sale is opened, and a preliminary title report is produced.
The role of a QI is defined in Treas. Reg. §1.1031(k)-1(g)(4). Under IRC Section 1031 an owner of business or investment property may exchange that property for other like-kind property within a statutorily mandated period of time, and defer current recognition of gain on the sale of the old property.
When you take out a mortgage, lenders want to make sure you have enough money to pay your homeowners insurance and property taxes. One way to do that is to set up an escrow account with just ...
In its simplest form, a 1031 exchange is a tax deferral strategy for real estate transactions in which a property owner or investor sells one property and purchases another within a specific time frame. The transaction, however, must qualify as a "like kind" exchange. [10]
Intellectual property—incorporeal things like ideas, plans, orderings and arrangements (musical compositions, novels, computer programs)—are generally considered valid property to those who support an effort justification, but invalid to those who support a scarcity justification, since the things don't have the exclusivity property ...