1031 Exchange - Explained
August 18th, 2008 by mikegohThe US Internal Revenue Service (IRS) income tax law code section 1031 Exchange provides deferment of capital gains tax on certain exchanges of well-defined investment properties. The section requires that the exchange must be completed within a stipulated time limit if the tax payer is to benefit from the deferment of capital gains tax.
When a tax payer sells a property normally for cash, he is required to pay capital gains tax on the profits realized from the transaction.