The 1031 tax deferred treatment of capital gains is one of the best real estate investor vehicles for preserving and building real estate wealth. Section 1031 of the Internal Revenue Code allows property owners to exchange their property for other like-kind property. This makes it possible to transfer the financial gain that is realized from the sale of a property into another property and defer the payment of capital gains tax. A 1031 Deferred Exchange is not difficult, but there are very strict rules and timetables that must be followed.
You will need to work with a “QUALIFIED INTERMEDIARY” for Exchange transactions. The Intermediary is specifically structured to assist Exchangers and Real Estate Professionals in effecting successful IRC Section 1031 Exchanges. They fully understand the real estate transaction, the needs of the investor, and the technical requirements of the IRS.
The Intermediary will initiate documentation for exchanges with as little as twenty four hours notice and furnish all the paperwork and necessary forms. They will also consult with the real estate professional, tax consultant, and legal advisors involved in the exchange.