What is a 1031 Exchange?

What is a 1031 Exchange?

A 1031 Exchange is a transaction in which you can sell one property and buy another without United States tax consequence. This approach is generally done to avoid paying capital gains tax on the sale of property and/or property that has been substantially depreciated for tax purposes over a number of years, and therefore has a very low tax basis.

The IRS Code — Section 1031 allows a taxpayer to take up to 100% of the proceeds from the sale of property and purchase ownership of a new property, while deferring the tax on the sale of such property.

More information here.


Share your thoughts