Are you thinking of selling an investment property (rental) but don’t want to pay taxes on your gains? With the rise in property values a lot of folks are thinking about selling and a 1031 tax free exchange may be something for you to consider. The 1031 is the tax code that allows you to sell one property and buy another while deferring capital gains, however you must follow the rules or it could be disqualified by the IRS and end up being a tax mess.
Take a look at the attached PDF for a quick rundown of the IRS rules regarding 1031 tax free exchanges:
- Must be like kind property
- You have to use an intermediary
- There are time restrictions