IRC Section 1031, A properly structured 1031 exchange allows an investor to sell a property (real property held for productive use in trade or business or for investment) to reinvest the proceeds in a new property of "like kind" and to defer all capital gain taxes.
- Federal Capital Gains (15% or 20%)
- CA State Tax
- Recaptured Depreciation (25%)
- Net Investment Income Tax (when applicable)
- A qualified intermediary is an entity that facilitates IRC section 1031 tax deferred exchanges.
- You have 45 days to identify the potential replacement properties.
- You have 180 days to close on your replacement property/properties.
- Always discuss a 1031 tax-deferred exchange with your tax or legal advisor.
- Asset preservation Inc can assist: apiexchange.com.
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