What is a 1031 Tax Deferred Exchange?
No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property or like kind which is to be held either for productive use in a trade or business or for investment."
The above is an excerpt from Section 1031 (a)(1) of the US tax code.
What this means:
Tax can be deferred to a later time if an Investment Property is exchanged for a like kind Investment Property, however the Tax Payer's primary residence does not apply.
What is "Like Kind" Property?
There is some confusion regarding what type of property may qualify for 1031 exchange. Current I.R.S. definitions label "like kind" property as any real property which is used in a trade/or business or which is held for investment.
A taxpayer may exchange any investment/trade or business property for any other property which would be held for investment/trade or business. The property types may differ.
A 1031 Exchange allows a Seller to complete a non-simultaneous exchange.
Surety Title Services of Florida has experience in working with tax advisors and other professionals in the field of 1031 Exchanges for implementing your tax-free exchange. While Surety Titles Services of Florida will not serve as the Qualified Intermediary ("Exchanger") as defined by the U.S. Tax Code, and does not offer advice as to the suitability of any exchange, it does have the knowledge and experience to serve as the 1031 Exchange Closing Agent.