Too many people mistake only pay
capital gains taxes due upon the sale investment property when they plan to purchase a replacement property. They simply haven't been told about the
wealth building strategy allowed by IRC Section 1031.
On April 25, 1991, the IRS issued deferred exchange regulation-Reg 1.1031(k)-, that allows taxpayers to defer all of the capital gains taxes resulting from the sale of investment property, when they will use a
Qualified Intermediary, follow the
IRS guidelines, and use the money to buy more suitable investment property within 180 days of their sale.
This means that you can reinvest the money you would otherwise have lost to capital gains taxes if you will use the extra money to buy more investment property for the purpose of making more money. This can be done within and between all classes of investment property anywhere in the USA. Our Service Team is here to help make
1031 Exchange as easy and effective for you as possible.
The
1031 real estate exchange is also often referred to as the
Starker 1031 Exchange or Starker Exchange,
because Starker was the first case in which a non-simultaneous exchange was approved by the court. At first, the IRS disallowed the exchanges because the IRS believed that
1031 real estate exchanges could only qualify if all
1031 exchange real estate involved were transferred simultaneously. The IRS said there could be no amount of time between the transfer of the relinquished property and replacement property in an exchange. The Starkers paid their taxes and filed suits in the U.S. District Court in Portland, Oregon. Three court cases ensued, tried by District Judge Gus Solomon:
