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tax-free exchange
(redirected from 1031 Exchanges)

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Tax-Free Exchange
Under Section 1031 of the Internal Revenue Code, the exchange of two assets of like kind, even if of different quality, that are used for a business or for investment purposes. The goods exchanged are not assessed capital gains taxes. More precisely, capital gains taxes are deferred until an asset is resold with no intention of reinvestment. Tax-free exchanges also apply if one sells an asset with the intention to use the proceeds to buy a similar asset. For example, if a farmer sells his farm and uses the money to buy another farm, capital gains taxes are likely deferred on the money he made on the sale of the first farm. The same would be true if the he traded farm for farm.

tax-free exchange
An exchange of assets between taxpayers in which any gain or loss is not recognized in the period during which the exchange takes place. Rather, taxpayers are required to adjust the basis of assets exchanged.

tax-free exchange

A common term for a tax-deferred exchange. It is not tax free; one pays the taxes at a later date. See 1031 exchange.



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A 1031 exchange is a particularly beneficial way for property owners to defer taxation and make the entire profit, not just the after tax profit, keep working for their benefit Has a passion for real estate investing, real estate and 1031 exchanges.
The 1031 Exchange Group assists clients in the deferral of capital gains taxes through the planning of and execution of 1031 exchanges.
Nationwide Exchange Services is the leading provider of 1031 exchanges in the United States, and over the years has become the preferred Qualified Intermediary (QI) for many Fortune 500 firms and top banking institutions in the U.
 
 
 
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