Section 1031

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Section 1031

A section of the Internal Revenue Code that allows for the deferral of capital gains taxes on the exchange of two assets, of like kind even if of different quality, provided that the assets are used for a business purpose. Under Section 1031, the goods exchanged are not assessed capital gains taxes, or more properly, capital gains taxes are deferred until an asset is resold with no intention of reinvestment. Section 1031 also allows one to sell 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 a farm for a farm. Stocks and bonds are expressly excluded from this preferential treatment.

Section 1031 (26 U.S.C.§1031)

The Internal Revenue Code section that addresses tax-deferred exchanges, also called like-kind exchanges. See 1031 exchange. To find the law's text, see the instructions at Section (federal code).

References in periodicals archive ?
Proceeds from this transaction will be redeployed through an Internal Revenue Code Section 1031 like-kind exchange (1031-Exchange), therefore, the net cash proceeds will be held in an escrow account until one or more properties are bought through the 1031-Exchange.
FCPT funded the acquisition with proceeds from its revolving line of credit and from an Internal Revenue Code Section 1031 like-kind exchange sale of an Olive Garden property in Florida announced earlier this week.
hotels to be acquired with the proceeds from the sale of the Waldorf Astoria New York are expected to be part of a like-kind exchange under Internal Revenue Code Section 1031.
in one or more transactions as part of a like-kind exchange under Internal Revenue Code Section 1031.
Hilton said it intends to use the proceeds from the sale to acquire additional hotel assets in the US in one or more transactions as part of a like-kind exchange under Internal Revenue Code Section 1031.
There is very little that Congressional Republicans and President Obama agree upon, but the elimination of Internal Revenue Code Section 1031, which establishes the basis for Tax Deferred Exchanges, appears to be one they do.
Real estate investors have long recognized the tax benefits of like-kind exchanges under Internal Revenue Code Section 1031.
INTERNAL REVENUE CODE SECTION 1031, tax deferred exchanges, provides one of the last available tax shelters by allowing permanent deferral of the payment of any taxes when investment properties are sold.
NES, the nation's leading provider of Internal Revenue Code Section 1031 Like-Kind Exchange services, is the only Qualified Intermediary (QI) to have achieved five consecutive SAS 70 Type II annual certifications.
Further, the company stated that proceeds from its revolving line of credit and an Internal Revenue Code Section 1031 like-kind exchange sale of an Olive Garden property in Florida, financed the above acquisition.
The seminar will focus on Internal Revenue Code Section 1031 and tax-deferred exchanges, both forward and reverse.
Once the number of exchange groups is determined, Internal Revenue Code section 1031 rules are applied separately to each group to determine the amount of gain recognized and the basis of the property received.

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