What Is A Section 1031 Exchange?
Property held for investment, business, or productive use can be exchanged for property of a similar type (referred to as a like-kind exchange) in an effort to defer capital gains tax that would normally be realized if the property was sold for cash or a non “like-kind” good. This process is referred to as a Section 1031 Exchange or Like Kind Exchange. Our title insurance agents can help answer your section 1031 exchange questions about the process of completing a section 1031 like kind exchange.
The Internal Revenue Service (“IRS”) sets forth the guidelines for section 1031 like kind exchanges and gives a very general definition of “like kind” to real property. This allows for the swap of many different classes of like-kind real estate without violating the section 1031 exchange rules. For example, improved property, unimproved property, ranches, farms, leasehold interest in property, and even perpetual water rights are all considered “like kind” in certain circumstances. However special care must be taken when personal property, cash, and certain liabilities enter the exchange as the section 1031 exchange rules become much more defined.
How To Complete A 1031 Exchange?
To receive more information about a section 1031 exchange transaction and determine whether a like-kind exchange is right for you, please contact our Florida Tax-Deferred 1031 Exchange Office as referenced below:
Tax Exchange of America, LLC
111 East Howard Street
Live Oak, FL 32064
Telephone: (386) 362-4419
Fax: (386) 362-4047