Section 1031 allows taxpayers to defer capital gains taxes, depreciation recapture, and other taxes on the sale of property used for business or investment purposes. If the sale proceeds are used to purchase a “like-kind” property, capital gains can be reinvested into the new property and taxes deferred to a later date, allowing exchangers to use their gains to continue to build wealth.
While this useful strategy is employed by small businesses, corporations, and individuals looking to build wealth for retirement, Section 1031 contains a lot of strict rules that must be adhered to in order for your exchange to qualify. You have to follow these rules and meet the deadlines of the 1031 Exchange Timeline in order for your exchange to be successful.
In this factsheet, we’ll walk through the basic process of a 1031 Exchange, including Forward and Reverse exchange scenarios, the 1031 Exchange Timeline, and what to look for in a Qualified Intermediary (and why you need one). This is a great resource for anyone new to 1031 and those who need to brush up on the rules.
Fill out the form to download the How to Perform a 1031 Exchange factsheet.
