Owners of U.S. investment or business properties should know about a key tax-deferral provision allowed by the Internal Revenue Service: the 1031 exchange. Also called a like-kind exchange, it’s a way of swapping one investment property for another.
Upgrading to a more valuable investment property would usually involve a taxable sale. But by carrying out a like-kind exchange under Section 1031 of the Internal Revenue Code, the property owner defers capital gains taxes. This leaves more value for the investor to put into a replacement property.
Continue reading “For Property Investors: Six Steps to a 1031 Exchange”