1031 Tax-Deferred Exchanges
The Internal Revenue Code imposes taxes when property is sold or transferred and a gain is realized. According to Section 1031 of the tax code, if a taxpayer adheres to strict code guidelines, then all or a portion of the gains from the disposition of business or investment property can be deferred or reinvested into a new replacement property. These deferred gains, as well as the gains from the new property, are not taxed until the new property is transferred and fails to qualify for tax deferral.To qualify for tax deferment, the taxpayer must structure the transaction as an exchange of one property for another of "like kind". Since 1921, tax-deferred or “1031” exchanges have evolved from a simple but restrictive two-party swap to today’s highly strategic and sophisticated exchanges. Now possible for taxpayers large or small, 1031 exchanges can only be facilitated with the guidance and specialized services of a Qualified Intermediary, like Michigan Title Insurance Agency, Inc. 1031 Exchange Services.
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Michigan Title Insurance Agency, Inc. facilitates tax-deferred exchanges. To
ensure our best possible service to the taxpayer. Financial Leverage |
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Strategic Flexibility
With a 1031 Exchange, the taxpayer can employ a number of tactics to increase
investment flexibility, such as:
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Consolidating many properties into one for ease of management
| Diversifying one into many for ease of future divestment
| Relocating properties geographically to take advantage of trends
| Changing property types (for real estate exchanges only)
| Improving investment performance
| Adapting to changes in needs and abilities, and other life transitions
| Replacing older properties with newer ones |
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Successful exchanges start with expert answers to your questions. Contact us today to find out more about the benefits of participating in a Section 1031 Exchange. Although the details and guidelines surrounding most 1031 Exchanges can be complex, 1031 Michigan Title Insurance Agency, Inc. exchange services are made easy!
Brief descriptions of the types of exchanges follow:
Simultaneous Exchange
A 1031 Exchange where property is exchanged simultaneously.
A 1031 Exchange where the taxpayer disposes of the relinquished property on one day, and then has up to 180 days from that date to acquire the replacement property.
Personal Property Exchange
A 1031 Exchange where personal property held for investment or used in business
can be exchanged only for property that is similar in use or in quality.
Reverse Exchange
A 1031 Exchange where the replacement property is acquired before the
relinquished property is transferred.
Build-To-Suit (Construction) Exchange
A 1031 Exchange where improvements or repairs are allowed to be made on a
replacement property before it is transferred to the taxpayer.
Reverse Build-To-Suit Exchange
A 1031 Exchange where the taxpayer is allowed to acquire and improve or repair
the replacement property before he or she sells the relinquished property.
Contact 1031@michigantitle.net for inquiries