What is a 1031 Tax Free Exchange?

Quite simply, a tax free exchange is a way for investors to "buy" and "sell" property without paying capital gains tax on the profit.

By the rules of IRS Section 1031, when the exchange is handled by a Qualified Intermediary, the tax may be deferred, thereby maximizing equity and liquidity for the investor.

The Qualified Intermediary is essential to completing a successful and valid 1031 exchange. That's where we come in.

To qualify, the property to be exchanged must pass these simple tests:

  1. The property is used for investment, and is not your primary residence.
  2. The property must be exchanged for property of like-kind (building for building, boat for boat, etc.).
  3. The acquired “replacement property” should be held for 12 months if you are seeking long term asset status.

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