Section 1031 Exchanges & You

Under the appropriate circumstances, a section 1031 exchange can save you a significant chunk of money. But, be advised that this type of transaction is not right for every situation. That’s why it is important that you know all of your options before you consider 1031 exchanges.

When is a 1031 Exchange NOT a Wise Option?

A 1031 exchange would not be necessary if you do not have taxable gain. So, if you inherit a piece of property and you immediately sell it, there’s usually no reason to do a 1031 exchange (because there’s typically no gain). On the other hand, if you receive the property because your mother or father has been living on it for the past ten years but it was given to you ten years ago, you likely have a gain and may want to look into a 1031 exchange.

In most cases, a 1031 for the sale of personal property would not work because it is not an income-producing asset. Likewise, a 1031 exchange is not possible for common stock. If you are a dealer of real estate (meaning that you buy and sell property and have a history of buying and selling property) you are not allowed to do 1031 exchanges.

What if I’m Still Not Sure?

Tax law continues to change, and getting a second opinion can be a wise move. Although most Certified Public Accountants are likely familiar with 1031 exchanges, it is important that you speak to a CPA who is well-versed in navigating the sometimes tricky circumstances of these transactions. Knowing the 1031 exchange rules can help you save a lot of frustration…and money.

Request a Free 1031 Exchange Consultation

If you think you may qualify for a 1031 exchange, it’s time to call the experts at Baker Retirement and Wealth Management, P.C. We have been serving the greater Evansville area (Newburgh, Boonville, Jasper, Henderson, Owensboro, Mount Vernon, and beyond) with guidance regarding tax laws, family farm inheritance tax strategy, small business accounting, and more for nearly thirty years.

Call Baker Retirement and Wealth Management today at 1-866-244-3517.

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Baker Retirement & Wealth Management is not a registered broker-dealer nor a registered investment advisor. Baker Retirement & Wealth Management is not a registered broker-dealer nor a registered investment advisor. Baker Retirement & Wealth Management and Vanderbilt Financial Group are separate and unaffiliated entities. Vanderbilt Financial Group is the marketing name for Vanderbilt Securities, LLC and its affiliates. Vanderbilt Financial Group does not provide tax or legal advice. Please consult with your tax and/or legal advisor regarding your personal circumstances. Securities offered through Vanderbilt Securities, LLC. Member FINRA, SIPC. Registered with MSRB. Clearing agent: Fidelity Clearing & Custody Solutions
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