About 1031 Exchanges and How to Defer Capital Gains Tax
What Is a 1031 Exchange?
A 1031 Exchange is a way to defer paying federal—and possibly state—capital gains taxes on property sales. How? By exchanging the property for a similar (or like-kind) property rather than selling it outright.
1031 Exchanges Are Also Known as Like-Kind Exchanges
1031 Exchanges fall under Section 1031 of the Internal Revenue Code and can be used for a range of real and personal property.
- Real estate is like-kind with real estate—farms, ranches, residences, commercial properties, are all like kind.
- Personal property includes cars for cars, trucks for trucks, private commercial aircraft for private commercial aircraft—one at a time or through mass program exchanges with vehicle fleets.
The exchanger—you—get a window of time to find and purchase similar property. A Qualified Intermediary—Exchange Services, LLC—holds the funds from the sale of your original property in a Qualified Trust Account until you find a replacement property or properties.
LKE Exchange Programs for Fleet or Equipment Leasing Pools
If you do more than 100 exchanges a year, let Exchange Services, LLC, help you with special LKE exchange program regulations, often for fleet or equipment leasing pools.
Ready to Make an Exchange?
The information contained herein is for informational purposes only and does not constitute tax, legal, or accounting advice. You are advised to seek appropriate professional advice regarding your specific facts and circumstances. All exchange and qualified intermediary services are offered through Exchange Services, LLC, a Utah limited liability company and affiliate of Zions First National Bank, California Bank & Trust, Vectra Bank Colorado, National Bank of Arizona, and Nevada State Bank.