Investment Tips
Please consult a Licensed Authority for detailed information.
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What is a 1031 Exchange?
Internal Revenue Code (IRC) Section 1031 is one of the last remaining tax loopholes. It is a
powerful tool that allows investors to exchange any investment property for any other investment
property. For your exchange to be allowed, you must follow specific IRS regulations.
1. The properties being exchanged must be of like kind.
2. You must identify and close on your replacement property within a specific period of time.
3. 100% of the proceeds from your current property must be held by a Qualified
Intermediary and applied toward your replacement property.
4. Your replacement property must be of equal or greater value to the property you have sold.
5. Properties being exchanged must be used for investment. Personal residences are not
exchangeable.
IRS TAX Tip
If you sell your main home, you may be able to exclude up to $250,000 of gain ($500,000 for
married taxpayers filing jointly) from your federal tax return, according to the IRS. This exclusion is
allowed each time that you sell your main home, but generally no more frequently than once in
every 2 years.
You must have owned the home and been your primary residence for at least 2 out of the 5 prior
years. You also must not have excluded gains from another home sale during the 2 years prior to
the current sale.