The IRC 1031 Exchange, when properly structured, allows an owner to sell an investment property and reinvest the proceeds in a new investment property while deferring the capital gains taxes. 1031 Exchanges are often called tax-free exchanges because tax is not paid, but deferred until sometime in the future - and in some cases you may never pay tax.

If you do not do an exchange when you sell a business or investment property, you will generally have to pay a tax on the gain, which ranges from 15% to 30%.

The IRC Section 1031 Tax Deferred Real and Personal Property Exchange has specific requirements for the exchange process to maintain the tax deferred status of the transaction.  Details can seem complicated, but with an experienced professional to guide you through the transaction, a tax-free exchange is worry-free and safe.
Some of the benefits to completing a 1031 Exchange are:

  • Increasing cash flow
  • Reducing your tax burden
  • Changing location of your investment property
  • Investing in a newer property
  • Diversifying types of investments
  • Relocating your vacation rental



For more information on 1031 Exchanges, email Connie