1031 Exchange Explained

1031 Exchange Explained

A tax-deferred exchange is a method by which a real estate investor trades one or more relinquished commercial real estate for one or more replacement commercial real estate of like-kind, while deferring the payment of federal income taxes and some state taxes on the transaction. In turn, IRS section 1031 provides that no gain or loss shall be recognized on the exchange of commercial real estate held for productive use in a trade or business. The theory behind IRS section 1031 is to allow the real estate investor to reinvest the sale proceeds into another commercial real estate, foregoing any economic gains that may have been realized from the sale. If you have recently sold, or are thinking of selling investment commercial real estate, we can assist in matching you with a qualified 1031 tax expert. A 1031 tax expert can help you explore your 1031 exchange options. Contact us today for a free consultation.

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