For investors, a 1031 Exchange may provide an effective tax strategy for tax deferral as part of succession and estate planning. Internal Revenue Code Section 1031 provides that “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment”.
Defer Capital Gains
Section 1031 of the Internal Revenue Code provides an effective strategy for deferring the capital gains tax that may arise from the sale of your business/investment property. By exchanging the property for like-kind real estate, property owners may defer their tax and use all of the sale proceeds for the purchase of replacement property. Like-kind real estate includes business/ investment property, but excludes any personal use property.
Did You Know…
A 1031 Exchange may afford you the opportunity to defer capital gains tax and build wealth.
Examples of Like-Kind Properties
| Office Buildings | Single-Family Rentals | Hotels and Motels | Easements |
| Retail Centers | Apartment Buildings | Mineral Rights | Tenancy-In-Common (TIC) Interests |
| Warehouses | Condominiums | Water Rights | Delaware Statutory Trust (DST) Interests |
| Vacant Land | Industrial Property | Air Rights | Leasehold Interests (30 Years Remaining or Less) |
| Duplexes and Triplexes | Rental Resort Property | Development Rights | New York Cooperatives |