Mention tax exchanges or 1031’s and most people feel like they must be from another planet, or at least a complex financial animal to be deciphered by a tax accountant or lawyer. In fact, on the surface at least, a tax exchange is merely selling property, usually real estate, and replacing with another according to a simple set of guidelines.
This is not to say the IRS regulation can’t get complicated, because it can in some cases, but for a novice to have a mind-freeze at the very thought of a 1031 exchange should not be necessary. This article from the Realtor Magazine goes even further to explain why exchanges on balance are actually revenue positive, rather than an evil vehicle shorting the US Treasury coffers.
Scott Elkins is a commercial real estate practitioner with a combined 57-years of financial and real estate experience.
