1031 Exchanges

Properly executed 1031 Exchanges will allow taxpayers to defer the recognition of a capital gains tax when selling real property. It is possible to postpone the payment of long term capital gains taxes for as long as one lives. That means that the investor will have more money available for investment each time, causing the real estate portfolio to grow much more than would otherwise be possible. This is what many refer to as "swap 'til you drop'.

Working with your attorney and/or accountant, TREG will evaluate the benefits to be derived from a tax-deferred exchange under IRC Section 1031. If appropriate for you, we will utilize a qualified intermediary and will help you navigate the intricacies of a 1031 Exchange for your property.

The seller should decide whether to enter into a 1031 Exchange before signing a purchase and sale agreement for the property in question.

Be warned that IRC Section 1031 is very complex, and that you should be properly advised if you intend to enter into a like-kind exchange. If the Internal Revenue guidelines are not strictly adhered to, the exchange may be disallowed, in which case capital gains taxes will be due and payable in full.

For additional information on 1031 Exchanges, go to http://www.realtor.org/libweb.nsf/pages/fg408