What Is a 1031 Exchange?
While a 1031 exchange (also called a like-kind exchange or a Starker) encompasses many different components, the short answer is that it is a way for people to buy and sell investment type properties in order to defer income tax on the financial gain of the property.
For many, this is known as the ultimate tax shelter when it comes to buying and selling real estate investments. While this is a beneficial vehicle for many, 1031 exchanges do not work for everyone.
An in-depth conversation with your tax advisor and attorney should be able to determine whether a 1031 exchange will work for you. There are many things to consider like your current tax profile and other financial transactions that you have taking place. In some…