1031Exchanges and TIC Offerings explained from the perspective/bias of a Real Estate Broker.

Disclaimer –The following is not to be taken as legal advice. It is not to be taken as accounting advice. Consult your attorney and accountant before entering into any transaction involving the issues and investment vehicles described below.

 "No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment.”- Section 1031 of the Internal Revenue Service Code.

Capital Gains Taxes can not be avoided. The good news is that they can be deferred by effectively trading one investment property for another in what is referred to as a "like kind" exchange. An Internal Revenue Service Code 1031 exchange is a transaction in which a taxpayer is allowed to sell one property and buy another and defer the tax consequence, usually through delayed exchange, but sometimes with a simultaneous exchange, or reverse exchange. There are many technical details that need to be met in order for the Internal Revenue Service to recognize the sale and purchase as meeting the requirements to enjoy the tax benefits of Section 1031.