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"No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or of investment if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment."
1031 exchanges provide investors with one of the best tax strategies for preserving the value of an investment portfolio. By using an exchange the investor is able to defer the recognition of capital gain taxes that would otherwise be incurred on the sale of investment property. To qualify as an exchange the relinquished and replacement properties must be qualified "like-kind" properties and the transaction must be structured as an exchange. Using Investment Property Exchange Services, Inc. as the "Qualified Intermediary" will provide the investor with the necessary reciprocal transfer of properties to create the exchange and the "Safe Harbor" protection against actual and constructive receipt of the exchange funds as required by 1031.
Read more at Scottsdale and Phoenix Real Estate Connection 1031 Exchanges
By Warren Neal - Phoenix Realtor - Scottsdale Real Estate Agent
This post was posted on March 23, 2005 in the following sections: Articles.
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