1031 Tax Exchanges
One of the best kept secrets in the Internal Revenue Code:
To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. There are very stringent time and documentation requirements in the exchange process. McKesson Title Corp., as Qualified Intermediary, can guide you through the entire process. Because of the complexity of the process, we recommend beginning with an in-person, no-cost consultation.
How to know if you're a candidate for a 1031 Tax Exchange:
There are seven primary 1031 exchange rules, which the team at McKesson can further explain:
- The properties must be like-kind
- The properties must be exchanged for investment or business purposes only
- The net market value of the purchased property must be of greater or equal value to that of the property sold
- The taxpayer must not receive boot, meaning if a partial 1031 exchange were carried out, the difference, or boot, is the amount capital gains taxes must be paid on
- The same taxpayer must appear on the titles for the property purchased and the property sold
- The property owner must identify three like-kind properties within the 45-day identification window
- The exchange must be completed within the 180 day purchase window
Don’t pay unnecessary taxes. McKesson Title Corp. will work with you and your accountant and/or attorney to achieve the tax deferment you are entitled, by law, to receive!
The 1031 exchange can offer significant tax advantages to real estate buyers. These exchanges, also known as Starker exchanges (named for the first tax case that allowed them), allow real estate investors freedom to change their investment strategies without incurring tax liability.
Often overlooked, a 1031 exchange is considered one of the best-kept secrets in the Internal Revenue Code.