1031 / Tax Deferred / Tax Free Exchange
Generally, when you sell real estate held for investment or business use, you have to pay tax on the gain from the sale of your property. Section 1031 of the Internal Revenue Code allows you to defer paying capital gains taxes. A 1031 Exchange is not a tax loophole. It is a code section written by Congress specifically to allow anyone who meets its requirements to sell their property and defer paying tax on the gain.
The main point of a 1031 tax deferred exchange is that capital gains taxes on real estate held for investment can be deferred indefinitely if the owner of qualifying property exchanges, rather than sells it. The savings from the exchange will vary by the size of the investment, your own income and other factors (such as state tax rates).
There are strict criteria and time limits (45 days to identify a replacement property of like-kind and 180 days to close the sale on the replacement property) for executing a successful 1031 exchange and we are one of the few companies in the city of New Orleans (and all of Louisiana) with more than a decade of experience in this area.
Southern Title is an expert at the 1031 exchange closing process. Contact us to learn about how you could potentially defer the capital gains due on the sale of your investment property. Or, if you are ready to begin a 1031 tax-deferred exchange, contact our affiliate, Southern Exchange Services, to begin your transaction. Alternatively, Sign up for one of our Louisiana Real Estate Commission licensed continuing education classes.