There are rules and regulations for everything, and Like-Kind exchanges are no different. Section 1031(a) of the IRS states rules for realized gains, and losses, that occur from exchanging like-king property. Primarily that none of the gain, or loss, will be recognized at the time the exchange occurs. It also states that property being exchanged has to be identified within 45 days, and received within 180 days. Other 1031 sections include the following:
- 1031(b): lists when like-kind property and boot can be received. The gain is recognized to the extent of boot received
- 1031(c): covers cases similar to 1031(b), but refers to losses instead of gains
- 1031(d): explains the requirements for calculations during a like-kind exchange
- 1031(e): expands on the fact that livestock of different sexes are not of like-kind
- 1031(h)(1): stipulates that real property outside of the U.S. and real property inside the U.S. are not of like-kind
The 1031 Exchange can be helpful for investors, but has many rules that has to be followed. A Qualified Intermediary, such as Tennessee 1031 Exchange, will be extremely useful in navigating these requirements. To start your exchange, click on the button below!