Section 1031

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 buyer faced the imminent expiration of capital gains tax benefits associated with a Section 1031 exchange.
Capital Square 1031 is a national real estate investment and management company that sponsors institutional-quality real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code.
Capital Square 1031 is a national real estate investment and management company that sponsors real estate exchange programs that qualify for tax deferral under Section 1031 of the Internal Revenue Code.
Furthermore, the purchase and sale of a DST interest may qualify for capital gain nonrecognifion under Section 1031 of the Internal Revenue Code.
I am selling a few of my investment properties and wish to use Section 1031 of the Internal Revenue Code to exchange these properties for a property or properties that will be closer to where I am moving.
LURAY, Va: Blue Ridge Bank expanded commercial banking services to include the ability to service IRC Section 1031 deferred exchange transactions as the qualified intermediary.
FCPT anticipates redeploying the proceeds from this transaction through an Internal Revenue Code Section 1031 like-kind exchange.
Two tax provisions returning in 2017 as "high priority" policy issues for IREM are carried interest and Section 1031 like-kind exchanges.
Under Section 1031, certain assets, in particular commercial real estate, can be sold and reinvested in similar, "like-kind" property tax-free without limit.
Under Internal Revenue Code (IRC) section 1031, direct swaps can be difficult to accomplish because the parties may not each have something the other wants.
As many wealthy clients settle into their retirement years, they have been able to use Section 1031 of the Internal Revenue Code as a tax-planning measure when buying and selling real estate as an investment property.
Companies using the break, also known as a Section 1031 asset exchange tax break, are required to put the proceeds of the asset sale into an escrow account controlled by a third party.