Section 1031 of the IRS Code offers real estate investors a valuable tool to defer or avoid capital gains tax on real estate transactions along with the opportunity to build wealth and save taxes. A 1031 exchange lets you dispose of investment property, use all of your equity to acquire replacement investment property and defer the capital gains tax that would ordinarily be paid.
1031 exchanges are primarily designed for people interested in investment properties, not for typical home sellers and buyers looking to purchase a residence. Replacement property acquired in an exchange must be of "like-kind" or similar to the property being sold. The following are examples of properties that could be eligible for a 1031 exchange:
- Single Family Rental
- Multi-Family Rentals
- Farms/Ranches
- Raw Land
- Retail Offices
- Motels/Hotels
- Golf Course
- Industrial
- Leases of 30 years or more
Examples of properties that are NOT eligible for a 1031 exchange are primary residences and real estate in foreign countries. If you would like to explore how a 1031 exchange could work for you, we'd be happy to give you more information. Please feel free to contact us by phone or email.
Warm regards,
The Davidson Team
"Start Packing Today!"
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