Understanding the Basic Concepts of a 1031 Exchange
What are some of the basic concepts of a 1031 exchange? If you are looking for a real estate property investment opportunity, having knowledge of a 1031 exchange option is something to pay attention to. The origins of the 1031 exchange opportunity stem from the IRC Section 1031 from the Internal Revenue Service.
The 1031 exchange allows for an investor to take a property that they own and sell it. They can then take the proceeds from that sale and put them into a new property. When they do this, the capital gains that they received from the prior property can be deferred. All capital gain taxes will be deferred to a later date. No gain or loss is recognized in the sale and purchase of the properties as you exchange the two.