IRC 1031 Exchanges Take the Bite Out of Capital Gains
If you are looking into selling a piece of income property or business property, you know doubt are contemplating the potential capital gains tax implications of doing so. And for good reason; those consequences can be serious. But there is an alternative to paying the tax at the time of the sale, by using the proceeds of the sale to buy a new “exchange” property.The 1031 exchange tax is not eliminated in this transaction, it is deferred. However, this deferral could be a huge benefit. As with most IRS codes, this one has its complicating aspects, so work with a Qualified Intermediary to better understand how you can take advantage. In fact, in order to qualify for the tax benefit, you must work with a QI.
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