The IRS has three mandated rules that you must follow in regards to identifying your next property for the 1031 exchange to be valid.

We are dealing with deferring taxes so we have to be very careful to follow all of the IRS rules governing 1031 Exchanges or we could be in for some stiff penalties!

Tax-free Exchanges have been going on in the United States since the early 1920s! People would find a property that they liked and convince the owner to trade or swap properties with them.

The article enumerates the benefits and associated requirements of 1031 tax deferred exchange. The related importance of selecting the right intermediary and complying with the guidelines set out by IRS has been highlighted.

A tax-deferred exchange is a sure way to maximize the wealth and returns from real estate investing. It helps you to avoid the tax bill on real estate sales. Herein an investor can reinvest the proceeds from sale in real estate and defer the tax liability.

In 1031 exchange when you sell investment real estate, you need lo buy new investment real estate in order to fall under this rule. So, you can replace residential with commercial, or industrial with residential¡ªas long as it's still investment real estate.

Under Section 1031 of the Internal Revenue Code, like kind property used in a trade or business or held as an investment can be exchanged tax-free. The tax system, through the tax-deferred exchange, encourages sellers to buy similar properties of equal or greater value by making them tax exempt.

A 1031 exchange can be a great benefit for investors. Learn what they are, and how to easily overcome some obstacles to use this tax deferral to your advantage.

The Internal Revenue Code Section 1031 allows your investment real estate to roll the increase from the old Investment Property’s sale over to the new Investment property with no paying of taxes. If you meet there requirements, you could sell your dilapidating duplex and buy yourself a new apartment building, or a warehouse, an office building, or even bare land. You are not required to hold the mortgage loan on another duplex.

Following is a reproduction of the IRS's rules and requirements for 1031 tax deferred exchanges with regards to real property. If you have any questions regarding the sale of your real property or questions about what qualifies for a 1031 exchange or not, please consult your tax professional.

Performing a 1031 tax deferred exchange allows you to defer Capital Gains taxes on real estate bought and sold for investment purposes. Learn how the process works and get the information you need to do a successful 1031 exchange.