Can you explain a 1031 exchange using two existing rental properties buying one property and what income tax there would be?
Answers | 1
Investment Manager (Financial Advisor) in North Charleston, SC
January 04, 2017
A 1031 exchange is designed to defer taxes. Check with your property attorney for specifics in your situation.
The exchange can include like-kind property exclusively or it can include like-kind property along with cash, liabilities and property that are not like-kind. If you receive cash, relief from debt, or property that is not like-kind, however, you may trigger some taxable gain in the year of the exchange. There can be both deferred and recognized gain in the same transaction when a taxpayer exchanges for like-kind property of lesser value.
Here is a link to the IRS regulations:
You can contact us directly for more information or to discuss in greater detail.
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