First |
It is an Internal Revenue Code Section found in our tax laws at
Section 1031. |
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| Second |
It is a mechanism of tax deferral not an exemption or an
exclusion from taxation. |
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| Third |
It is accomplished by strict adherence to rules and regulations
set out by the IRS, our Legislature and Courts. |
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| Fourth |
It is typically used to defer gain on the sale of business
or investment real estate
when it is the intention and interest of the seller to re-invest part of all of
the proceeds of a sale in more real estate. |
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| Fifth |
A successful 1031 Tax Free or Like Kind Exchange frequently
utilizes a Qualified Intermediary like Lehigh Valley 1031, LLC, to fall within
the law’s Safe Harbor (IRS approved) transaction. |
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| Sixth |
A 1031 timeline appears below - |
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Prior to Sale |
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Time of Sale |
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By
45th Day |
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By
180th Day |
| Have written agreement with Intermediary |
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All sale proceeds are held by Intermediary |
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Identify possible properties to purchase |
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Close on replacement property |
| Have Agreement to Sale |
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| Give Notice to Buyer |
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