Capital Gains and Section 1031 Exchanges
Uncle Sam is your partner in every real estate investment you make and he wants his share of the profits (capital gains tax) every time you sell. The U.S. Internal Revenue Code -Section 1031, however, allows you to defer taxes that would have had to be paid on capital gains through the exchange of like-kind properties. If a taxpayer intends to reinvest the proceeds from the sale of one investment property, and invest those same proceeds again in the purchase of a similar or like-kind property, he should never have to pay capital gains taxes on the sale of the original property .
Field Guide to 1031 Exchanges
Section 1031 of the U.S. Internal Revenue Code allows investors to defer capital gains taxes on the exchange of like-kind properties. 1031, or tax-deferred, exchanges hold great advantages for real estate investors. This Field Guide from the National Association of REALTORS® provides access to articles, manuals, forms, ideas, and other information to help you start building wealth with the 1031 exchange.
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