What does Section 1031 (of the tax code) mean to investors??

It can be a dream come true!!

A 1031 exchange allows an investor to dispose of an existing investment property (for whatever reason - disenchantment, a desire for another property, etc.) and pay NO CURRENT TAXES. 

The investor uses the sale proceeds of the previous property (including those which WOULD HAVE BEEN PAID as taxes) to acquire a qualified, like-kind, replacement property.  That replacement property carries forward in the investor's portfolio.

The benefits of Section 1031 of the Tax Code to investors are enormous, BUT (and there's always a "but"), you have to be VERY careful of the mechanics of the transactions.  There are very defined restrictions on the TYPES of qualified replacement property, the DOCUMENTATION trail of the transactions, and the TIMING of the transactions.

So, how does a proper exchange occur??  The tax code provides for the existence of an entity called a "Qualified Intermediary" (or QI).  The QI, for a fee, acts to facilitate the 1031 exchange of the properties and among many things, provides the investor with all required documentation in case of audit by the IRS.  While this process may sound a bit silly, it is nonetheless the process the IRS requires in order for you to qualify for this benefit.

A good QI's work will survive any IRS audit efforts.  MY QI has NEVER had a transaction fail upon IRS review - that's a great record!!  You can't get better than "always right."

Here are some questions for you:

Do you have investment properties you would like to dispose of and replace?

Would you like to retain ALL of the sale proceeds and put them to work for YOUR benefit - or would you like to pay lots of taxes to the federal and state governments?

If you want to investigate the benefits of a 1031 exchange, don't hesitate to contact me immediately.  You can click My 1031 Info (the button is on the sidebar AT LEFT) to send a message to me.  Fill in the brief information and I'll get back to you quickly.