Attention to Detail Crucial For Section 1031 Exchanges
Section 1031 of the Internal Revenue Code of 1986, as amended (“IRC”), provides that no gain or loss is recognized on the exchange of property held for productive use in a trade or business, or for investment. Tax law thus allows taxpayers to exchange certain kinds of property for like-kind property without immediately paying tax on the gain. The tax is deferred until the replacement property is ultimately sold. Then, the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax. View full article (PDF).