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§1031 Exchange Options

Real estate has been and still is a powerful wealth accumulation vehicle. From tax-deferred income to tax-deferred growth, the tax advantages of property ownership are a primary reason many choose to invest in the asset class. The IRS allows investors to defer paying taxes on real estate if one utilizes the tax code properly. Real estate investors and agents commonly use the term §1031 Tax-Deferred Exchange or §1031 Exchange. These terms come from Section 1031 of the IRS Internal Revenue Code. A 1031 enables investors to defer capital gains and depreciation recapture by reinvesting proceeds from a sale of investment property into “like-kind” property. Understanding the do’s and don’ts of this section of the tax code is vital to the return on your real estate investments.