Understanding 1031 Exchanges: Basics and Pitfalls
Why Take this Course?
Like-kind Exchanges, also known as tax deferred exchanges, are defined by Internal Revenue Code (IRC) section 1031. A 1031 Tax Deferred Exchange offers taxpayers one of the last great opportunities to build wealth and save on their taxes by deferring their capital gains. By completing a 1031 Exchange, the Taxpayer (“Exchanger”) can dispose of investment or business-use assets, acquire replacement property, and defer the tax that would ordinarily be due upon the sale. This course will explain what a 1031 exchange is, the benefits of using this tool and the requirements that must be met to qualify for the capital gains deferral. More complex issues such as mixed-use properties, reverse exchanges and improvement exchanges will be touched on, along with the proposed federal budget’s impact on these exchanges.
Upon completion of this session, participants will be able to:
- Explain Internal Revenue Code section 1031
- Understand the benefits of a 1031 exchange
- Explain the qualifications needed to defer capital gains tax
- Identify like-kind exchanges.
- Understand the terms used in a 1031 exchange including a qualified intermediary, delayed exchange and “napkin test”
- Identify common pitfalls and misconceptions
- Understand how stocks, mortgages and depreciation are calculated in an exchange.
David GorenbergLearn More
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