what is a 1031 exchange?

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I'm creating this board to help any member answer their questions regarding the IRS code 1031 for exchanging investment real estate.

posted by 1031exchange

Can an exchange be made with newly purchased property, prior to having income from it, never occupied by buyer?

posted by jeff386
over 5 years ago

Jeff, the short answer to your question is yes, you can do a 1031 exchange. But my question for your question would be, why would you want to? Is your real estate purchase a new purchase, or are you deferring gain from an earlier 1031 exchange? If you were to sell the property today, do you have a substantial gain? The 1031 exchange is used to defer any applicable capital gains taxes due on appreciated property.

posted by 1031exchange
over 5 years ago

Thanks, yes, a large gain!

posted by jeff386
over 5 years ago

Make sure you contact a Qualified Intermediary and have that set up before you sell off your property. You can find a list of them on www.1031.org.

posted by 1031exchange
over 5 years ago