Exchange Services
The fundamental advantages of a tax deferred exchange may be utilized
to diversify, consolidate or leverage your investment portfolio. With
respect to real property, the broad definition of "like kind"
provides investors with numerous options to accomplish their investment
goals.
Properties that qualify for IRC Section 1031 treatment
IRC Section 1031 provides that to qualify for tax deferred treatment,
the relinquished property must be exchanged for replacement property that
is like kind. Like kind means similar in nature and character notwithstanding
differences in grade or quality. The fact that any real estate involved
is improved or unimproved is not material for that fact relates only to
the grade or quality of the property and not its kind or class. As such,
raw land held for investment may be exchanged for single-family rentals
used for a trade or business or any combination of the following:
- Single Family Rentals
- Farms/Ranches
- Office/Commercial
- Motels/Hotels
- Golf Courses
- Some Recreational Properties
- Multi Family Rentals
- Raw Land
- Retail/Industrial
- Leasehold Interest of 30 years or more
Personal Property
As a result of tax reform legislation, 1031 exchanges are no longer allowed on personal property, effective January 1, 2018.
