Anyone involved with advising or counseling real estate investors, including real estate agents, lawyers, accountants, financial planners, tax advisors, escrow and closing agents, and lenders, should know about tax deferred exchanging. People often fail to consider tax deferred exchanging as an investment strategy because they are misinformed about the requirements of exchanging. However, once their misconceptions have been cleared up, property owners usually find that Section 1031 is worth considering. In order to do an Exchange, I have to find someone to trade properties with. By using a Qualified Intermediary you can sell to anyone and buy any property that you want.
Exchanges can only be of land for land, rental for rental, etc.
Any given exchange must be of like-kind property. IRC Section 1031 defines like-kind as property held for investment or productive use . This includes vacant land, residential rental property, commercial property, condominiums, apartment buildings, or any real property that is not the taxpayer s primary residence. Any combination of types is allowable. My closing is tomorrow.