1031 Tax - Deferred Exchanges
One of the best features of owning investment property is the ability to participate in a 1031 tax deferred exchange.
When you sell a property, you can legally defer paying taxes on your investment gains by following the procedures approved by the Internal Revenue Service (IRS).
Some of the key things to remember:
- A 1031 exchange only works for investment property, not the sale of a residential property
- An investment property can be exchanged for any other “like-kind” property (I.E. if you sell an apartment building, you could buy an industrial property)
- You must identify potential properties within 45 days of the sale of your property; and close on one of them within 6 months of the sale
- Your cash must stay with a qualified intermediary when you sell and when you buy. If not, you lose the ability to do a 1031 exchange
Gold Group Realty is well versed in this process and is able to provide additional information on how to participate in a 1031 exchange upon request.