Did You Know?
1031 exchanges provide investors with one of the best tax strategies for preserving the value of an investment portfolio. By using an exchange the investor is able to defer capital gain taxes that would otherwise be incurred on the sale of investment property.
The investor can then use the entire amount of the equity to purchase substantially more replacement property. To qualify as an exchange the relinquished and replacement properties must be qualified “like-kind” properties and the transaction must be structured as an exchange. Using a qualified intermediary, the investor with the necessary reciprocal transfer of properties to create the exchange and the “safe harbor” protection against actual and constructive receipt of the exchange funds required by 1031.