Heartland Exchange LLC

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What is a §1031 Tax Deferred Real Estate Exchange?

Section 1031 of the Internal Revenue Code allows you to defer capital gains taxes and depreciation recapture by selling investment property and acquiring new “like-kind” replacement property. In an ordinary sale the property owner is taxed on the gain realized by the sale of property. In addition, if the property owner has depreciated the property, the property owner will be subject to depreciation recapture at a rate of 25%. When engaging in a tax deferred real estate exchange the property owner defers both capital gains taxes and depreciation recapture on the sale of the property. In order to complete a Section 1031 tax deferred real estate exchange you must comply with the rules of the Internal Revenue Code and all other applicable tax laws.

Consolidate properties to minimize management responsibilities.
Relocate a current investment to a location with faster appreciation.
Exchange from non-income producing property to property with cash producing capabilities.
Exchange for new property that fits new lifestyle needs.
Exchange a partial interest in property to a fee interest.
Exchange for estate planning goals.
Exchange from a small property to a larger property to meet growing business needs.
Diversify a large property into several smaller properties.