1031 Exchange

What is a 1031 Like-Kind Exchange?

Section 1031 of the tax code allows owners of qualified real estate to sell the property without having to pay taxes on the gain from the sale, as long as this revenue is used to acquire like-kind replacement property.

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What kind of property is eligible?

Nearly all real property held for business or investment purposes is considered to be "like-kind" to all other real property.  The following types of real property are often exchanged with taxes deferred:

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• Single or multi-family rental properties

• Office buildings

• Apartment buildings

• Shopping centers

• Farm and ranch land

• Vacant land held for investment

• Billboard sites

• Hotels and motels

• Cell tower sites and easements

• Mineral, oil and gas rights

• Water and timber rights

• Wind farms

• Warehouses 

• And many more

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Types of 1031 Exchanges:

Forward Exchanges - The most common type of exchange, in which one asset is sold and another purchased within the space of 180 days.

Reverse Exchanges - A reverse exchange is an exchange in which the new property is acquired before the old property is sold.

Build-to-Suit/ Property Improvement Exchanges - In a build-to-suit or property improvement exchange, the exchanger may put exchange funds toward the cost of improving the replacement property.

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Contact me today to learn more!