What is a 1031 Exchange?
When you sell property, you generally have to pay tax on any gain, the difference between your basis in the property and the sales price. Gain is usually the result of appreciation over time or depreciation deductions taken for tax purposes. section 1031 of the internal Revenue Code provides taxpayers with an opportunity to defer payments of this tax when business or investment property is sold or replaced with other "like-kind" business or investment property. By deferring tax on the gain which would otherwise be due, you are left with more funds for current investment, enabling you to achieve far greater returns than would be possible with after-tax proceeds from a traditional sale of your property.

Possible Reasons to Consider an Exchange
• Avoid capital gains tax
• Exchange non-depreciable property for depreciable property
• Exchange raw land for income producing property
• Shift investment from current property to one with higher growth potential
• Exchange a single investment property for multiple investment properties
• Exchange property in one area for property in another more suitable to you without incurring
• capital gains