1031 Exchange – 1031 Tax Deferred Exchange – Asset Preservation

Palm Beach Gardens, Florida – A 1031 exchange, also known as a 1031 tax deferred exchange is a strategy and method for selling an investment property, that’s qualified. At that point the Investor proceeds with an acquisition of another investment property (also qualified) within a specific time frame. The logistics and process of selling a 1031 exchange property and then buying another property are practically identical to any standardized sale and buying situation. However a “1031 exchange” is unique because the entire transaction is treated as an exchange and not just as a simple sale. It is this difference between “exchanging” and not simply buying and selling which, in the end, allows the taxpayer(s) to qualify for a deferred gain treatment. So to say it in simple terms, sales are taxable with the IRS and 1031 exchanges are not. The 1031 Exchange works great for example if you are selling a Wendy’s or Burger King and you trade up to 2-3 McDonald’s, Walgreen’s, CVS sites or a Walmart site.
Look at: US CODE: Title 26, §1031. Exchange of Property Held for Productive Use or Investment

Most buyers and sellers of Commercial Real Estate look at 1031 exchange as an option as they consider their investment agenda. They figure that they defer paying state and federal capital gains taxes and depreciation recapture until they die and their estate goes to their spouse, charity or their children. They may also be able to hold off the alternative minimum tax that might sneak up on them if they were to sell a Commercial Property. Contact us if you are in need of a qualified intermediary for your 1031 Exchange.