1031 Exchanges

1031 exchange (also known as a like-kind exchange) is a transaction that allows a taxpayer to defer the capital gains tax that would be due on a sale of an asset. 1031 exchanges are almost exclusively used in real estate, but they can be used for other types of assets as well. A 1031 exchange allows real estate investors to defer the capital gains tax on the sale of appreciated property if they reinvest the proceeds in a new property. But while a 1031 exchange may sound simple in premise, there are specific rules that must be followed to completely defer the capital gains tax.

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