1031 Exchanges
A 1031 exchange, also known as a tax deferred exchange, is a simple strategy for deferring capital gains tax by selling one qualified property and then acquiring another qualified property, known as a replacement property, within a specific time frame. According to IRS rules, this period ends at exactly 180 days after the date on which the person transfers the property relinquished or the due date for the person’s tax return for that taxable year in which the transfer of the relinquished property has occurred, whichever is earlier. No extensions are allowed for any reason whatsoever even if the 180th day occurs on a weekend or a holiday. All or a portion of the proceeds you want to defer capital gains tax must be held by a qualified intermediary to be eligible for a 1031 exchange. There are a variety of other IRS qualified tax deferred exchange strategies including the reverse 1031 exchanges, 1033 exchange, and more. For more information on tax deferred exchanges of real property, contact us to discuss your situation.
