Are you ready to dispose of an asset, but concerned about the tax implications? Section 1031 of the Internal Revenue Code allows owners of certain types of investments to sell one asset and buy another of "like-kind" while deferring capital gains taxes. United Bank Wealth Management Advisors can serve as your Qualified Intermediary to facilitate such an exchange.
What is a 1031 Tax-Free Exchange?
A 1031 Tax-Free Exchange, also known as a tax-free real estate exchange, is for those looking to make real estate investments. In a typical property sale, the owner usually has to pay taxes on their gains. However, in a properly executed 1031 exchange transaction, the realized tax is deferred. These transactions are also referred to as “tax-deferred exchanges” or “like-kind exchanges” and are sanctioned under Section 1031 of the Internal Revenue Code.
The property you subsequently purchase should be of equal or greater value than the property you originally sold. Properties included in this type of deal are vacant land, rental property or any property used for business.1031 Tax-Free Exchange requirements include:
As Your Qualified Intermediary
United Bank strongly recommends that you seek tax and legal advice regarding your 1031 Tax-Free Exchange. As your Exchange Agent, United Bank employees cannot make any guarantees or commitments that the transaction will be recognized as qualifying. If IRS tax penalties or interest are levied against the client, United Bank will not be liable.