Section 1031 of the Internal Revenue code provides an exception to paying capital gains upon the sale of property that would otherwise be due and payable in the year of the disposition.  The taxes are deferred.  In order for the exchange to be tax deferred, the replacement property must be of equal or greater value. All the net proceeds from the sale of the first property must be spent on the new property. A 1031 Tax Free Exchange is basically no different from an ordinary sale and purchase of property,  the only difference  is that there are certain documents that are required to show intent that the transaction is part of an exchange for property and not a sale.  Tax Fee Exchanges can allow an investor or a property owner the chance to transfer equity from one investment to another.

     There are certain time constraints for the 1031 Delayed Exchange.  The Seller only has 180 days from the settlement of the relinquished property or the due date of that year’s tax return, whichever is first, to acquire replacement property.  Other requirements must be met as well. There is an identification period of 45 days in which the exchanger must identify the replacement property. If you need additional information regarding your exchange, our office can help assist you with all
the things necessary to successfully complete your 1031 Exchange.