Video: Tax Deferral, Not Avoidance, with a 1031 Exchange

Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange s allow for the deferral of capital gains, depreciation recapture, and net investment income tax in qualifying real estate transactions. The deferred taxes come due at the time the Exchanger sells their property without a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange ; however, should the Exchanger pass away the tax would be deferred indefinitely. Learn more in this short video.