1031 Exchange
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What is a 1031
Exchange?
The sale or disposition of real estate or personal property and the
acquisition of similar real estate or personal property structured as a
tax-deferred exchange transaction pursuant to Section 1031 of the Internal
Revenue Code in order to defer Federal, and in most cases state, capital
gain and depreciation recapture taxes.
What does "like kind" mean in a 1031 exchange?
When it comes to real estate, all forms are "like kind" to all other
forms. i.e. an office building can be exchanged for a trailer park.
How long do I have to purchase the new property?
The "new" property must be acquired within 180 days of the disposal of
the "old" property.
Is exchanging less than 100% of an interest allowed?
Yes. Fractional parts are allowed.
What is a "boot"?
A "Boot" is anything of value exchanged which is not "like-kind" to the
relinquished property. In most cases this takes the form of either cash or
mortgage debt to equalize the transaction.
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