1031 Exchange
Section 1031
A section of the U.S. Internal Revenue Service that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes. Taxes on capital gains are not charged on the sale of a property if the money is being used to purchase another property – the payment of tax is deferred until property is sold with no re-investment.
BREAKING DOWN ‘Section 1031’
The idea behind this section of the tax code is that when an individual or a business sells a property to buy another, no economic gain has been achieved. There has simply been a transfer from one property to another. For example, if a real estate investor sells an apartment building to buy another one, he or she will not be charged tax on any gains he or she made on the original apartment building. When the investor sells the original apartment building and purchases a new one, the value used from the original to buy the new one has not changed – the only thing that has changed is where the value is being held.
What is a ‘Tax Code’
A tax code is a federal government document, numbering tens of thousands of pages that details the rules individuals and businesses must follow, in remitting a percentage of their incomes to the federal government. The tax code is used as a source by tax lawyers whom bear the responsibility of interpreting it for the public.
Read more: Tax Code
Henry S Becker has done exchanges himself for his own investments. Reach out to Exchange your Current commercial asset for another one. Ask how he turned $13,000 into $147,000 then $3,000,000
As always: Please consult your attorney; tax professional before making any financial decisions.
