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What Is 1031? also referred to as a 1031 Exchange or Like-Kind Exchange, and falls under Section 1031 of the Internal Revenue Code. This tax section deals with property value in sale of business or trades and other like sales. Contact us to get your property exchange prepared & filed by a qualified Treasury Regulations professional. Need Help with 1031 issues ? Then contact us now >
 
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§ 1031. Exchange of property held for productive use or investment...Read more law >

Related Hot Topics

    • Tax Redemption
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    • Property Exchanges


    There are some things that Section 1031 doesn't apply to.

    Section 1031 does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, or certain other assets.
Did You Know ?
There are some things that Section 1031 doesn't apply to.

Section 1031 does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, or certain other assets.

There are alot of different aspects to this tax section , including Treasury Regulations . When it comes to Treasury Regulations , there is alot to know when Treasury Regulations involves Section Ten Thirty One and Real Estate.


Need to get more information about Treasury Regulations & 1031 issues? Then click here to contact us.

An exchange or Like kind exchange is defined by section 1031 of the Internal Revenue Code. This code specifies that if an asset , usually some form of real estate such as land or a building, is sold and the proceeds of the sale are then reinvested in a like kind of an asset then no gain or loss is recognized, allowing the deferment of capital gains taxes.

Other aspects of Treasury Regulations and this tax exchange filing include the Following:

  • Like-Kind Property

  • Personal Property

  • Doing a Partial Exchange


So how does one defer from capital gains taxes when it comes to property? With Treasury Regulations and Section 1031, every transaction is different but the principal is the same and the answer is simple: as long as the property you exchange is yours and it is a "Like-Kind" Property, capital gain taxes will be deferred.

Break It Down More
Keep in mind that "deferred" taxes do not mean you do not have to ever pay them. It simply means you pay them at another time, usually when the property you have obtained through an exchange or through Treasury Regulations is sold. It is still a very smart move to make, and Treasury Regulations and Section 1031 remains some of real estate's best kept secrets.

In order to qualify certain rules must be followed. Broadly these rules are as follows :

  • Both the relinquished property and the replacement property must be held either for investment or for productive use in a trade or business. A personal residence cannot be exchanged.

  • The asset must be of like kind. Real property must be exchanged for real property. Personal property must be exchanged for personal property.

  • The proceeds of the sale must be invested in a like kind asset within 180 (property must be identified within 45 days) days of the sale.


Need to get more information about Treasury Regulations & exchange issues? Then click here to contact us.