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1031 Exchange

Internal Revenue Code section 1031 can be a powerful mechanism for deferring capital gains tax on certain types of investment transactions. This section allows a taxpayer to exchange real or personal property for new like-kind property. All this while deferring any realization of capital gains for up to 180 days. During this deferral period, the proceeds of the sale are placed with a Qualified Intermediary. Strict adherence to the provision is necessary to quality for deferral. It is critical to select a Qualified Intermediary that has a thorough understanding of all the details of the regulations and specializes in this type of transaction.