In a 1031 exchange, one can exchange an interest in real property held for business or investment purposes. Depending on how the sale is structured, it may be classified as an asset sale, which could qualify for tax deferral under Section 1031 of the Internal Revenue Code.
An asset sale involves disposing of various property components or assets of a business, which can be categorized as:
Real Property Assets, such as land, buildings, and permanent fixtures eligible for tax deferral under Section 1031.
Non-Section 1031 Chattel Property, including movable objects, equipment, intangible assets, and goodwill that do not qualify for tax deferral.
Inventory, which refers to goods held for sale and are not eligible for tax deferral under Section 1031.
On the other hand, a stock sale is the sale of an entity, such as the owner's membership interest in an LLC, partnership interest, or shares of stock in a corporation. These interests are typically excluded from tax deferral under Section 1031, according to Treasury regulation § 1.1031(a)-3.
1031 Exchanges Made Easy
At CPEC1031, LLC we make 1031 exchanges easy by walking you through the process from start to finish. For over twenty years, our qualified intermediaries have been facilitating like-kind exchanges of real estate for clients throughout the United States. We are ready and waiting to assist you through the ins and outs of your next 1031 exchange of real estate. Contact our like-kind exchange team of professionals today to get help with your next exchange.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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