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1031 Tax Exchange
1031 Tax ExchangeA 1031 tax exchange is an exchange in which capital gains tax deferral is possible to real estate owners who sell their investment, rental, business or vacation real estate, and reinvest the net proceeds in other real estate. Real Estate held for these purposes are called 1031 properties. Sometimes they are called like kind sales.
Earn Income OnlineLooking for an earning opportunity with global reach? Want to tap international markets with an established ecommerce partner? Look no farther ... here is your answer!1031 Tax ExchangeThe sale of the sold property and the acquisition of the replacement property do not have to be simultaneous. A non-simultaneous exchange is sometimes called a Starker Tax Deferred Exchange. Property owners may sell 1031 properties and defer taxes on the sale's profits by meeting the requirements of Internal Revenue Code known as the 1031 exchange. The purpose of the 1031 Exchange or like kind exchange is to allow sellers of like kind property to buy replacement property within a specific time period and defer taxes.Sellers have a maximum of 180 calendar days from the closing of the initial sale to complete the 1031 exchange. Within the first 45 days of this period a seller must designate candidate properties and properly identify them to the IRS. A seller may target up to 3 properties regardless of value or a group of properties with a combined value that does not exceed 200 percent of the value of the initial property sale. The funds in a trust account can be used as earnest money for designated property once all IRS requirements for a 1031 exchange are met. If no new properties are identified in the first 45 days or no designated transaction is completed during the full 180 day period, the trust will be liquidated and the sale proceeds will be taxed at the prevailing capital gains rate. Section 1031 is most often used in connection with sales of "real property". Some exchanges of personal property can qualify under Section 1031. Exchanges of shares of corporate stock in different companies will not qualify. Also not qualifying are exchanges of partnership interests in different partnerships and exchanges of livestock of different sexes. 1031 Tax Exchange Home | Site-Map |
