What is 1031
Internal Revenue Code Section 1031 Tax-Deferred Exchanges
In general, the Internal Revenue Code imposes taxes on the revenue resulting from the transfer of investment property. Section 1031 of the Code is an exception to this general rule allowing 100% of the gains from the disposition of the property to be deferred. These deferred gains, as well as the gains from the new property, are not taxed until the new property is transferred and fails to qualify for tax deferral.
To qualify for this deferral, strict adherence to Section 1031 and all of its requisites are imperative. Therefore, taxpayers must structure the transaction as an exchange of one property for another of "like kind", as opposed to a sale for cash or other non-like kind property to reinvest into new property.
Since 1921, tax-deferred exchanges have evolved from a simple but restrictive two-party swap of properties to today's highly strategic and sophisticated exchanges. With the guidance and specialized exchange knowledge of ANi X31, a Qualified Intermediary (QI) facilitating Section 1031 transactions throughout the United States, it is now possible for all taxpayers, large or small, to take advantage of this tax shelter.
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