1031 Exchange Services

Section 1031 is the provision of the Federal Income Tax Code that permits companies and individuals who sell their investment, rental or business real estate to exchange that property for a property of 'like-kind' without incurring capital gains tax. In short, the taxpayer is deferring the tax liability. When the replacement property is sold in the future for cash, the gain is realized and subject to capital gains tax. 

Alternatively, if you conduct a 1031 tax deferred exchange and pass the properties on to heirs then the capital gain may truly never be realized. The heirs receive the property at a 'stepped up basis', meaning the value of the property at the date of the transfer would pass through the estate to your heirs. This is a great strategy for long term wealth building. 

The most common reasons for a 1031 tax deferred exchange are consolidation of smaller asset to achieve scale, increase in cash flow, capital appreciation and building generational wealth.

If you are interested in conducting a 1031 tax deferred exchange please contact our firm below and one of our experts will walk you through the specific timelines and requirements.