What is a 1031 exchange?

A 1031 exchange is a tax-free exchange of similar properties, permitted under Section 1031 of the Internal Revenue Code.

Real estate investors use this program to avoid capital gain taxes when selling their property. However, they must use the proceeds to buy another like-kind property within the strict procedures required by the IRS. Unlike straight exchanges, the 1031 exchange is a delayed exchange, which means that you don’t have to purchase your “exchange” property at the same time as you’re selling your current property.

For more information, see also the following entries:

• :Capital Gains:
• :IRS:
• :Like-Kind:
• roperty:
• :Real Estate:
• :Real Estate Exchange: