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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 like-kind exchange can involve the exchange of one business for another business, one real estate investment property for another real estate investment property, livestock for qualifying livestock, and exchanges of other qualifying assets. Like-kind exchanges have been characterized as tax breaks or "tax loopholes". [1]
A 1031 exchange, also called a like-kind exchange, is a real estate transaction where you trade a passive-income-generating property — a business-use property or one held as an investment ...
A 1031 exchange allows certain real estate investors to defer capital gains taxes when selling one investment property and reinvesting proceeds from the sale into another similar property. Taxes ...
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.
Continue reading → The post Real Estate: 1031 Exchange Examples appeared first on SmartAsset Blog. But if you’re interested in real property, you need to know the ins and outs of purchasing ...
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.
Knowing the 1031 exchange rules helps you save on taxes.