Published on our January 2023 Newsletter
Question: “What are the basic qualifications for a 1031 Exchange?”
Chris’ Answer:
Your new purchase also needs to be an investment property and not a primary residence. The new investment property must be of “like-kind” to the property being sold.
Vacation homes or condos can qualify.
- Key Considerations:
- To achieve the maximum tax benefit, the reinvestment must be of equal or greater value.
- The Qualified Intermediary must ensure that all eligibility requirements are adhered to. The investor must not have access to the funds from the sale.
- There are limitations on the amount of capital gains that may be tax deferred.
Did you see our other article about 1031 exchanges and how can you benefit from them? Read it here.
*For more information on 1031 Exchanges, their requirements and additional stipulations, consult a licensed tax professional before making arrangements to begin a 1031 Exchange.
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