1031 Exchange - Defined
What is a IRC 1031 Tax Deferred Exchange?
Over 70 years ago Congress authorized you to receive an interest free loan for an unlimited term. The amount of your loan would equal the tax liability incurred IF you sold real estate investment property. The only condition is that the loan does not have to be repaid until you actually SELL your property. If you can not sell, how can you benefit from the loan? There is only one way. By exchanging property under Internal Revenue Code (IRC) 1031.
The Revenue Act of 1921, Section 202(c) provided that no gain or loss would be recognized from an exchange of property. Several changes in the law have created what we now refer to as IRC 1031, however the basic purpose of the original act, (to exchange real estate without tax liability), remains intact.
There are only two ways to earn money in the America.
1. Work for it.
2. Put money to work for you.
The single, most effective, and profitable, method to put money to work for you, is in the periodic use of IRC 1031. In fact, prudent investors NEVER sell, they continue to exchange until their WILL is probated and their heirs receive a new stepped-up value basis.
There is, for the moment, an unusual disparity between the amount of rental tenants will pay and market costs of the property. This disparity is caused by the high interest rates of the past and current market costs.
When people decide to liquidate real estate they usually want cash. People who want to exchange want income property. For the first time in many years, this disparity makes it possible for people who own real estate to exchange and realize more net cash than selling.
The National Real Estate Exchange Network offers you properties across the country that you can exchange into - tax deferred.
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