Are you a real estate investor looking to defer taxes on your property sales? Look no further than a 1031 exchange! This type of exchange, governed by Code Section 1031 and various IRS Regulations and Rulings, allows taxpayers to sell real estate held for investment or use in a trade or business and use the funds to acquire replacement property without recognizing any gain or loss.
Section 1031 has been a part of the Internal Revenue Code since 1939, with only two additions in over 75 years. While it initially appeared to only allow for direct exchanges between two taxpayers, the 1979 decision in Starker v. U.S. allowed for deferred exchanges where the taxpayer sells the relinquished property to a buyer and acquires replacement property from a seller using the realized proceeds. These deferred exchanges are often referred to as "Starker" exchanges.
Although the IRS initially challenged deferred exchanges, the Tax Court has been liberal in allowing them. In 1991, the IRS even adopted regulations governing their structure. So, if you're looking to defer taxes on your property sales, a 1031 exchange conducted by SECURITAS1031 may be the perfect option for you!
