Do you have real estate you wish to sell? Are you concerned about Uncle Sam knocking on your door wanting to collect a tax bill after you sell your property?
You are not alone, many people are afraid of the IRS, but don’t worry you do not have to! There is a special section in the tax code that basically allows the IRS to partner with you regarding your tax bill. This special code section is IRC Section 1031.
In a nut shell, if you own investment real estate (commercial real estate, rental property, farm land, etc.) the IRS will allow you to defer that gain if you acquire “like-kind” property within a specified time period. The keyword here is defer, not tax free.
If done properly, a 1031 exchange is a powerful tool in preserving and building wealth! In subsequent parts of this blog series, we will discuss the appropriate process needed to accomplish a 1031 exchange so the IRS can partner with you in building your wealth!
Jeffrey W. Foster, CPA
There are no secrets to success. It is the result of preparation, hard work, and learning from failure. ~Colin Powell