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A 1031 exchange is similar to a traditional IRA or 401(k) retirement plan. When someone sells assets in tax-deferred retirement plans, the capital gains that would otherwise be taxable are deferred until the holder begins to cash out of the retirement plan. The same principle holds true for tax-deferred exchanges or real estate investments.
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. ... a 1031 exchange allows an investor to ...
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 ...
A like-kind exchange under United States tax law, also known as a 1031 exchange, is a transaction or series of transactions that allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability from the sale of the first asset. A like-kind exchange can involve the exchange of one ...
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.
Use 1031 exchanges for real estate investing to lower taxes.
Section 1031 exchange—If a business sells property but uses the proceeds to buy similar property, it may be treated as a "like kind" exchange. Tax is not due based on the sale; instead, the cost basis of the original property is applied to the new property. [59] [60]
Knowing the 1031 exchange rules helps you save on taxes.
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