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Turlock Real Estate  "Homes in Turlock, CA"
Smith & Associates
Dan@SmithsSellRE.com

Phone: 1-800-859-9416
Mobile: (209) 534-7485
Fax: (209) 669-5314
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2051 Geer Road   
Turlock, CA  95380   
 
  

  

     


Diane Smith		   What is a 1031 Exchange?

In the summer of 1990, the I.R.S. finally came out with the long awaited rules on Deferred Exchanges. Section 1.1031 of the Internal Revenue Code laid out in detail the procedure for turning a sale and purchase type transaction into an exchange.

These new rules allowed owners of certain types of like kind Real and Personal property to sell their property and buy other like kind property without paying the Capital Gains Tax.

The like kind provision for Real property is quite broad, and includes Land, Rental, and Business property. Any of which, can be exchanged for the other. The like kind provision for Personal property is more restrictive.

This type of property must be in productive use in a business (depreciable property), and can only be exchanged for the same type of property.

As an example a business aircraft for a business aircraft (a fixed wing airplane for a helicopter will work), or a commercial truck for a commercial truck, etc.

The rule also required that the "Exchanger" use a safe harbor to hold the proceeds while the exchange was in progress, and spelled out what those safe harbors were.

The only practical safe harbor for most "Exchangers" is a "Qualified Intermediary."

Prudential Commercial Real Estate is a qualified intermediary, and is set up to assist you in making a smooth and easy exchange.

The rules also required certain time limits and other requirements, all of which can be explained by our commercial real estate professionals.*

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* Be sure to consult an attorney for legal advice.
     
 
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© Common Name, Uncommon Service!<br>©2000 - 2006. An independently owned and operated member of The Prudential Real Estate Affiliates, Inc. is a service mark of The Prudential Insurance Company of America. Equal Housing Opportunity. This Website is not intended to be a solicitation for the purchase, sale or lease of real property outside the State of California.