Tagged : 1031 Exchange

A tax deferred exchange makes it possible to avoid paying capital gains tax when moving investments between two similar types of property. Without this tax deferral, tax would have to be paid when one investment property was sold, even if the intention was to use the money to buy another investment property of the same kind. By using a tax deferred exchange, it is possible to avoid paying any capital gains tax until the final property is sold, without replacement. Avoiding capital gains tax will allow more money to be retained and invested in the replacement property.

A like-kind investment property is one that is intended to be used for a similar purpose as the original investment property, for example, a real property that will be used for business,…