Tax Deferred Exchanges

Did you know that Internal Revenue Code Section 1031 allows you to defer capital gains taxes on the sale of property held for investment or productive use in a trade or business?

To take advantage of the 1031 Tax Free Exchange, you need an independent thirdparty qualified intermediary. You may select your intermediary from among several options, as long as you don’t choose: yourself, a relative, your agent or your attorney, accountant or real estate broker. We suggest selecting your intermediary based on security, service, experience and price.

Whitaker Marketing Group works with clients as they complete IRS 1031 tax deferred exchanges. We are available to assist your attorney or accountant in putting together the exchange and then proceed to coordinate the process. We have, and use a very knowledgeable Qualified Intermediary.

What Kind of Property Qualifies for a 1031 Exchange?

Real Property: Almost all kinds of real estate are classified as like-kind to each other. As long as a piece of real property is used for investment or in a business, it will qualify for 1031 treatment. Rental properties, farms, ranches are examples of real properties that can be exchanged for one another and properties leased for 30 years or more.

Personal Property: Personal property can be exchanged using 1031 as long as it is used for investment or in a trade or business and is traded for like-kind property. This may become an issue when businesses or apartment complexes are traded and items of personal property (stoves, washers, dryers, refrigerators, etc.) exceed 15 percent of the underlying real estate’s value.

Why Choose a 1031 Exchange?

The principal advantage of a 1031 exchange is the ability to use the entire equity of your property to acquire replacement property. The tax consequences of selling property are taken out of the equation and you are free to move equity into more lucrative or appropriate investments.