The 1031 Exchange Basics
Episode 4 of Tax in Action Is Now Live!
🎙️ In the latest Tax in Action episode, I break down the fundamentals of IRC §1031 exchanges, explaining how real estate investors can defer capital gains taxes by swapping properties rather than selling and buying separately. I cover common misconceptions about these transactions, walk through the strict timing requirements including the 45-day identification and 180-day completion rules, and examine court cases that reveal when the IRS challenges whether replacement properties were truly intended for investment purposes. The discussion covers qualifying property types, disqualified persons, and the practical mechanics of using qualified intermediaries to facilitate these tax-advantaged exchanges.
In this episode, you’ll learn the following:
🏠 When you can (and can’t) do a §1031 exchange;
🏛️ Rules and exceptions discussed in relevant Tax Court cases; and
📑 The necessary people and paperwork to make sure your §1031 exchange is legitimate.
Earn CPE for listening to this podcast!
§1031 exchanges provide a substantial wealth-building tax benefit for real estate investors, as long as they follow the rules. Tax advisors can help owners make sure their transactions are handled and reported properly.