Under section 1031 of the Internal Revenue Code capital gains tax can be deferred if the property is exchanged for like kind property. These types of transactions are typically referred to as 1031 exchanges.
These types of transactions have several restrictions and the sales transaction must follow an established protocol set forth in the IRS Code. An attorney and CPA with experience in 1031 exchanges is recommended.
Following are some questions to ask yourself to help determine if you have an opportunity to benefit from a 1031 exchange transactions:
- Do you own property held for “productive Use” (business property) that has value in excess of its book value (basis)?
- Are you looking to sell your property and replace it with property of the same nature or character (like Kind property)?
- Will your current or projected tax position benefit by deferring capital gains tax to future years?
If you answered yes to all of these questions you should learn more about section 1031 exchanges
If you want to learn more call us at 732-739-2632 for a consultation. Our Certified Public Accountants are ready to help.
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