defer gain: What is a tax free exchange?
- 01/30/08 07:30 AM
What is a tax free or 1031 Exchange?A 1031 exchange, also known as a Starker Exchange, enables you to sell property and invest the proceeds into another without having to pay tax on the gain--you defer it. And you can keep legally doing this over and over again.Reasons why people exchange investment real estate: Defer taxes that would otherwise be paid in a sale. Acquire property using the equity of a previously owned property as the down payment. Increase basis and possibly qualify for more depreciation. Create a more favorable financing situation. Diversify a portfolio. Consolidate a portfolio. Move investments to another (1 comments)