Video Transcript:
If you own investment property, you need to know how the IRS Section 1031, commonly referred to as a 1031 exchange, can work for you.
A 1031 exchange is a strategy that allows an investor to defer capital gain taxes by selling a property and then reinvesting the proceeds into a new, like-kind property.
Here are the basic rules of the 1031 exchange:
First, the taxpayer who sells must be the same taxpayer who buys;
Second, you must identify the new property within 45 calendar days after closing on the first property;
Third,you must purchase the replacement property within 180 calendar days after closing;
and fourth, the replacement property price must be equal to or greater than the old property
If the new property price is less than the old one, the difference may be taxed.
A 1031 exchange can be a powerful tax-deferment strategy offering many opportunities to investors. To learn more, give us a call today.
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