Exchange Services

A 1031 Tax Deferred Exchange offers taxpayers one of the last great opportunities to build wealth and save taxes. By completing an exchange, the Taxpayer (“Exchanger”) can dispose of investment or business-use assets, acquire replacement property and defer the tax that would ordinarily be due upon the sale.

1031 refers to section 1031 of Internal Revenue Code. A 1031 Exchange allows people to defer Federal capital gains tax, state ordinary income tax, net investment income tax, and depreciation recapture on the sale of Investment property if certain criteria are met including:

• Buy replacement property for equal or greater than sold for and reinvest all proceeds
• Identify replacement property within 45 days of close of sale
• Purchase replacement property within 180 days of close of sale
• Must Sell and Buy property that is considered “like-kind” to each other Process must be handled by a Qualified Intermediary

Reasons to Exchange

here are many reasons to exchange, such as:

• Defer Taxes: Federal, State & Depreciation Recapture
• Diversify or Consolidate a Real Estate Portfolio
• Increase Cash Flow
• Switch Property Types (Land, Industrial, Multi-Family, Office, Retail, Residential, Easements)
• Get Into Other Real Estate Markets (Exchange anywhere within the U.S. & Territories)
• Build & Preserve Wealth
• Set up Heirs for the Future (Estate Planning: Stepped Up Basis)
• Increase Purchasing Power
• Qualified Intermediary Choice

Choosing a Qualified Intermediary (QI) to handle your exchange is a critical part of your 1031 Exchange. Not all QIs are the same.