Internal Revenue Code 1031 enables you to sell investment or business
property now and use the proceeds to purchase another property without
giving a part of your wealth away in capital gain taxes to the
government. To qualify, the property (or equipment) must be held for
investment purposes or used in your business. Investment property
includes real estate held for investment or income producing purposes.
"No
gain or loss shall be recognized on the exchange of property held for
productive use in a trade or business or for investment if such
property is exchanged solely for property or like kind which is to be
held either for productive use in a trade or business or for
investment." (Excerpt from Section 1031 (a)(1)).
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The
IRS has made these tax-free exchanges easier by issuing safe harbor
regulations and you get their blessing as long as you follow all of the
rules. Do not pay taxes on the sale of property if you plan to reinvest
the proceeds in similar property.
There are multiple ways to structure the tax-free exchange to make it
convenient to the buyer of your property and the seller of the
replacement property you buy. We have extensive knowledge on the
intricacies of 1031 transactions. Let us help you plan and structure
the exchange so that you qualify for the full benefits of a
non-recognized gain. We will also help you navigate through the
appropriate documentation and escrow requirements that must me be in
place prior to the first closing on a sale. Contact us for a free
consultation on any sale of business or investment property.
