Section 1031 is an excellent tool that can be used for tax deferral by any US taxpayer. But many taxpayers aren’t aware of this opportunity. In this article, we are going to highlight how section 1031 of the Internal Revenue Code offers an opportunity for tax deferral to all taxpayers.
Deferring Taxes on the Sale of Real Estate
1031 exchanges of like-kind property allow any US taxpayer to defer their capital gains on the sale of real property. The catch is that the exchanging taxpayer has to take all of their net proceeds from the sale and move them into a new replacement property – thus continuing that taxpayers real estate investment.
An Incentive to Invest
The 1031 exchange was created to incentivize real estate investors to continue investing (thus spurring the economy) rather than just selling and taking the sales proceeds. 1031 exchanges are not loopholes or “tricks” as some people believe. They were created by the United States government to increase economic growth by incentivizing real estate investors.
Minneapolis Like-Kind Exchange Company
At Commercial Partners, we are focused on providing top-notch service to taxpayers looking to engage in 1031 exchanges of real estate. For the past 20 years, our qualified intermediaries have been helping taxpayers at all levels facilitate the deferral of taxes on the sale of real property. We can prepare all of your 1031 documents and answer all of the questions you may have about your like-kind exchange. Contact us today at our downtown Minneapolis office to learn more about our services and get your exchange started!