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TAX FREE EXCHANGE (1031)
Section 1031 of the IRS code allows us to
exchange real estate held for business or
investment purpose if the relinquished property
and the replacement property are of equal value
and both properties are help for productive use in
a business or for investment. There is no income
tax on a qualified exchange, but you cannot
receive money from the exchange. It must be
an exchange of real estate for real estate. You
may use a qualified intermediary to hold funds,
and notify the intermediary within 45 days of
the sale of relinquished property, of the identity
of the new replacement property. The purchase
of replacement property must be completed
within 180 days of the date of the sale of the
relinquished property. Please consult your CPA
before attempting a 1031 tax free exchange. This
article is not an attempt to provide legal advice.
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