When you sell real estate typically you must pay taxes on the gain from the sale of the property. The gain is caused by either the property appreciating over time or by taking depreciation deductions for tax purposes. Section 1031 of the Internal Revenue Code allows you to defer paying standard real estate taxes on this gain.

To help you make the most of your 1031 Exchange you are invited to utilize Re/MAX Central ’s specialized well educated agents who specialize in these types of sophisticated transactions. As in any other professional field such as law, medicine and architecture, highly trained specialists like our real estate agents can add tangible value to these types of transactions as opposed to general real estate agents.

We provide our clients and their advisors superior and comprehensive 1031 Exchange real estate services. We tailor each transaction to meet your needs, while helping you to understand and comply with all reporting and regulatory requirements. Meeting your 1031 real estate objectives is our highest priority and we have extensive experience in providing like kind exchange services to corporate, institutional, and individual taxpayers.

Overview of a 1031 Exchange
A 1031 is by no means considered a tax loophole – it is a code section written by the United States Congress to allow anyone who meets its requirements to sell their property and defer paying any taxes on the actual gain.

As a hypothetical example, the investor (exchanger) must have a like kind investment property for the exchange; i.e. investment rental property for another investment rental property or investment vacant lot for investment vacant lot (similar transaction).

Here is the exact IRS Code that defines a 1031 Exchange:
No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment.

Section 1031(a) (1) IRS Code
The exchanger should purchase a property for a higher basis than the selling property to get the best results possible. The exchanger as purchase can leverage their investment by financing and receiving cash at settlement and gaining additional tax incentives.

The types of real estate that qualify for a 1031 exchange under IRC Section 1031 include most real property held for investment – such as:

• Raw Land
• Hotels, Motels and Hospitality Properties
• Apartments and Multifamily Properties
• Office and Retail Buildings
• Agricultural Property including Farms
• Industrial Real Estate
• Single Family Rentals
• Vacation Rentals