What is a 1031 Exchange?
A 1031 exchange
(also known as a Straker exchange) is a tax
deferred exchange that allows you to roll-over all of
the proceeds received from the sale of an investment
property into the purchase of one or more like-kind
investment properties. At closing, proceeds are
transferred to a third-party who holds the funds until
they are used in the purchase of a new property.
These exchanges allow you to delay
the Capital Gains Taxes, and are deferred if all of the
exchange funds are used to purchase like-kind investment
property. The deferment is like getting an
interest-free loan on the taxable amount that you would
have owed on a cash sale. More equity is
retained which helps you move into properties of higher
value each time you do a 1031 exchange.
You are eligible for this deferred
Capital Gains Tax if you sell real estate that has been
held for investment purposes only. Your personal
residence does not qualify for a 1031 exchange.
For the purposes of real estate exchanges it must be
real-property for real-property, but the exchange
doesn't necessarily need to be for example one piece of
land for another piece of land. You will need to
refer to the IRS rules for the specifics on what types
of real estate qualify as like kind. You may
exchange a single property for multiple properties or
visa versa. Any funds from these exchanges not
used to purchase new investment properties are taxed as
a cash sale.
The links listed below are not
endorsed or recommended by Peggy Parks, Kellie
Fitzgerald or Recker Realty. They are links that
are listed on WWW at several websites and pertinent to
finding out more about a 1031 Tax Deferred Exchange.
1031 Exchange
Assistance - Learn more about 1031 and TIC
exchanges.
1031 Exchange
Explained - Informational website that explains a
1031 and what is involved. Must acquire a password
to access this site.
Exchange
Professionals - Information, calculators and more on
this website. This company also provides
intermediary services for tax deferred real estate
exchanges
IXG - Exceeding
Expectations in 1031 Exchange - IXG is a nation-wide
qualified intermediary specializing in all 1031 tax
deferred exchanges, including complex reverse,
construction, and personal property exchanges.
