Internal Revenue Code § 1031
| Benefits of 1031 Exchange |
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| Exchanging is the best way to avoid or defer capital gains when you want to sell one property and acquire another. Exchanges are easier to arrange than ever before because they don't have to be simultaneous. The IRS has even labeled them and given these Section 1031 Exchanges their blessing. In most cases, if the exchange is properly structured, you pay no income taxes on your capital gain at all. You may defer the payment of taxes until you finally sell off your properties, or you may keep exchanging properties and avoid the payment of taxes on the capital gains forever. When your heirs assume ownership of your property, they do so at its then current value, not at its old basis or depreciable balance. By exchanging, therefore, you avoid paying the capital gains while you are alive, and so do your heirs when they acquire it when you pass on. Tax deferred exchanges can become TAX-FREE exchanges. |
| Types of Exchanges |
| Exchanging can range from a simple swap of two properties to a complex, multi-leg, multi-party transaction involving construction and/or reverse exchanges. |
| Let us help |
| Please let us know if we may be of service to help you buy, sell, or exchange your investment properties. Athenstown Properties advisors can outsource CPA-certified analyses for all transactions we assist with to aid the investor with these important financial decisions. |
