Like-Kind Exchanges In Real Estate
Like-kind exchanges, also known as 1031 exchanges after Internal Revenue code 1031, gives investment property owners a tax deferment on gains if the sale of that property is then reinvested in a like kind property.
So what is considered a like-kind property?
Any real estate held for investment, whether improved or unimproved, is considered like-kind. For example:
- Improved for unimproved
- Fee for leasehold with 30+ years to run
- Commercial building for vacant land
- Duplex for commercial property
- Single family rental for an apartment
- Industrial property for rental resort property
In essence, any real property in exchange for another real property.
A exchange facilitator is needed forthis kind of sale and purchase as the IRS rules are strict as to who can touch the monies when exchanging.
For more information on Like-Kind Exchanges go to IRS Code 1031
For assistance in selling your investment property and finding an exchange property give me a call. 410-440-7839.