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 ?
The association co-sponsored The Economic Impact of Repealing or Limiting Section 1031 Like-Kind Exchanges in Real Estate, which was presented on Capitol Hill in Washington, D.
WASHINGTON, July 10, 2015 /PRNewswire-USNewswire/ -- The Real Estate Roundtable welcomes today's release of an economic study that quantifies the vast economic benefits of "like-kind" property exchanges (authorized under Section 1031 of the U.
This study evaluates agricultural land sales in Nebraska associated with Section 1031 tax-deferred exchanges and quantifies price differentials between exchange and nonexchange sales.
For example, like-kind exchanges under section 1031 are noticeably absent from the list.
Section 1031 provides that gain or loss is not recognized if property held for productive use in a business or for investment is exchanged for property of a "like-kind" to be held for similar purposes.
For almost 100 years, the Internal Revenue Code has included a provision called Section 1031 that allows investors to exchange their investment in one asset for another one, while deferring the payment of taxes until the ultimate disposition of the replacement asset.
Practical Guide to Like-Kind Exchanges Under Code Section 1031, 2d ed.
For the eco-wise investor who has done the land use and envisioning homework there are many exciting ways to produce positive outcomes, including the possibility of tax advantages such as those available through Federal and State programs and the 1031 Like-Kind Exchange as defined by section 1031 of the Internal Revenue Code, 26 U.
When corporations are considering the disposition of business assets, one of the issues that frequently arises is whether a like-kind exchange under section 1031 of the Internal Revenue Code might be available to defer gain recognition.
If a taxpayer is exchanging undeveloped land for land with a home on it or land with a commercial building on it, does this qualify as a Section 1031 "Like Kind" exchange?
Section 1031 exchange has become increasingly popular over the past three decades, and now predominates in many real estate markets.
Without a doubt, the single most efficient tool in the Internal Revenue Service Code for disposing of and acquiring property is the Section 1031 like-kind exchange.