The following section some general information about 1031 Exchanges. If you are interested in finding out more about a 1031 Exchange, please contact Land Title Group directly at (216) 643-7000.

What is a 1031 Exchange?
Under section 1031 of the Internal Revenue Code, a real property owner can sell property and then reinvest the proceeds in ownership of like-kind property and defer the capital gains taxes. To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. The 1031 Exchange can offer significant tax advantages to real estate investors. Often overlooked, a 1031 Exchange is considered one of the best-kept secrets in the Internal Revenue Code.

Who Should Consider a 1031 Exchange?
If you have real property that will net you a gain upon sale (generally property that has been substantially depreciated for tax purposes and/or has appreciated in fair market value), then you are exactly the person who should consider a 1031 exchange.

Why Should You Consider a 1031 Exchange?

• Defer paying capital gains taxes.
• Leverage.
• A properly structured exchange can provide real estate investors with the opportunity to defer all of their capital gains taxes. By exchanging, the investor essentially receives an interest-free, no-term loan from the government.
• Upgrade or consolidate property.
• Diversify. Own multiple properties rather than just one.
• Relocation to a new area.
• Differences in regional growth or income potential.
• Change property types among residential, commercial, retail, etc.