1031 Exchanges:

One of the most underutilized provisions in the Internal Revenue Code is section 1031 which defines "LIKE KIND" Property Transfers.

Known as a "1031 Exchange", an individual, partnership, corporation, or trust may sell highly appreciated property held for investment and purchase another property to be held for investment without paying capital gains taxes.

IRC Section 1031 allows an investment property owner to sell real estate interests in unimproved land, commercial or residential rental property, condos, co-ops, ranch or farmland free of federal, state and local (if any) capital gains taxes and purchase another property of "LIKE KIND".

The definition of "LIKE KIND" property held for investment is quite broad; raw land may be exchanged for a rental house; a rental house may be exchanged for a retail center; a warehouse may be exchanged for a farm. Property development rights may also be exchangeable under IRC Section 1031.

IRS issuance of Rev. Proc. 2002-22 has determined that fractional interests in Grade A, professionally managed Delaware Statuary Trust, or DST properties qualify as "LIKE KIND" real estate, paving the way for investment in previously unattainable buildings due, primarily, to purchase prices in the $10-$50 million dollar range.

Internal Revenue Code Section 1031 involves a series of procedures and regulations that must be met in order to take full advantage of this tax benefit. It is, therefore, critical that you receive proper advice from experienced, knowledgeable 1031 exchange specialists such as the associates of CLK Investment Advisors.

1031 Exchanges are highly complex real estate transactions that entail a significant degree of risk.

Disclaimer – Securities offered through Emerson Equity LLC
Member FINRA and SIPC.
CLK Investment Advisors is independent of Emerson Equity LLC

This is not a solicitation to sell or an offer to buy securities. Securities are sold only in states where Emerson Equity is registered or otherwise exempt from registration. All investment involves risk. Speak with your tax professional regarding your current tax situation and proposed investments prior to investing. Past performance is not indicative of future results.