What is a 1031 Tax Exchange?
A 1031 Tax Exchange is a tax-deferred incentive provided by the Internal Revenue System (IRS). It allows an owner of an investment property to sell the property for a similar or “like-kind” for no gain or loss.
For example: If you own a 12 unit apartment building in San Mateo that is sold at $2.25 million dollars. With the money gained say you purchase 3 single family homes in San Bruno purchased at $750,000 that you intend to lease individually. No capital gains or losses would be recognized.
With a knowledgeable accountant and a 1031 Tax Exchange Specialist like myself, this type of tax-deferred incentive can be a very valuable tool to be used in your real estate investments.