Without a doubt, one of the most commonly asked questions is "What exactly is a 1031 Exchange?" The 1031 Exchange, named after the IRS code allowing the exchange, can allow you to sell business or investment real estate and replace it with other business or investment real estate without creating a taxable event.

Many investors don't realize that the sale of investment property does not have the same exclusion enjoyed when you sell your principal residence. If you sell the property for more than you paid for it, you usually have a taxable gain. With a 1031 Exchange, you can defer the payment of the tax normally due on sale.

There are many benefits to performing an exchange instead of a sale and purchase of another property. A 1031 Exchange can be a great way to have more funds available for the new purchase. Since a 1031 Exchange defers any tax payment, that money will now be available for the new property.

Please follow the links below to learn how a 1031 Exchange works:

1031 Exchange: What is it?

1031 Basics: What are the requirements?

1031 Advantages: Why it is such a great tool