What is a 1031 exchange?

A 1031 exchange occurs when an investor uses funds obtained through the sale of land is used to purchase new land. That said, there are rules and regulations that dictate the terms under which land can be sold. Knowing these can ensure that you qualify for the tax deferral. Would you like to receive weekly emails with our latest blog/properties?

Can a 1031 exchange be used for a new property?

That said, a taxpayer may not have both the old and the new property titled in their name at the same time and qualify for a reverse exchange. A 1031 exchange occurs when an investor uses funds obtained through the sale of land is used to purchase new land.

How do I structure a 1031 exchange?

There are a number of important steps to a properly structured 1031 exchange: The real estate purchased with the proceeds must be like-kind. The tax must be paid on any “boot” in the year of the 1031 exchange. A boot is an addition of value to the swap that is not real estate.