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Reasons to consider the 1031 Like-Kind Exchange process.
Section 1031 of the Internal Revenue Code permits owners of business or investment property to sell property and purchase a similar “like-kind” property while deferring capital gains.
Main Reason For Consideration:
- Tax deferral available through a properly conducted exchange. It must be noted that a 1031 Like-Kind Exchange is not tax free, however, it only defers 1.) the capital gain and 2.) the tax on depreciation recapture. The Internal Revenue Service views this as a continuation of the original investment. Taxes on the capital gain and depreciation recapture are not incurred until an exchanged property is sold and cash proceeds are received.
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Additional Benefits Related to Performing a 1031 Like-Kind Exchange:
- Improve cash flow by deferring payments of taxes
- Leverage equity into purchase of replacement property
- Consolidate and diversify business or investment property holdings
The information contained at this site is solely provided for informational purposes and does not create a business or professional relationship. This website is intended to provide basic information about I.R.C. 1031 Section 1031 tax-deferred exchanges and does not contain tax or legal advice.
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