Providing professional and proven guidance.
Pioneer 1031 Co assists people who buy and sell investment property nationwide to defer capital gains tax by use of a Section 1031 tax-deferred exchange. Our goal is to provide professional guidance, exceptional customer service, and a quality product to benefit our clients.
Considering a
1031 tax-deferred exchange?
A 1031 tax-deferred exchange, also known as a like-kind exchange is a provision in the United States Internal Revenue Code that allows individuals or businesses to defer capital gains taxes on the sale of certain types of investment or business properties. The name “1031” refers to the section of the Internal Revenue Code that governs these exchanges. Check out the video from our General Counsel & Senior Vice President, Jesse Hamilton on why you might consider a 1031.
Why a 1031 exchange may be beneficial…
A 1031 tax-deferred exchange, governed by Section 1031 of the Internal Revenue Code, allows real estate investors to defer capital gains taxes when exchanging like-kind properties.
Eligible land types for a 1031 exchange include various real estate investments such as commercial properties, residential rental properties, vacant land, industrial facilities, and agricultural land. The key criterion is that the properties involved must be held for productive use in a trade or business or for investment purposes. Personal residences, dealer properties held for sale, and certain other types of assets do not typically qualify. It’s important for investors to adhere to the IRS guidelines and engage the services of qualified intermediaries to ensure compliance with the intricate rules surrounding 1031 exchanges.
Tax Deferral
The primary benefit of a 1031 exchange is the ability to defer capital gains taxes. By deferring the tax liability, taxpayers can reinvest the full proceeds into a new property, potentially allowing for increased purchasing power and continued investment growth.
Wealth Accumulation
By deferring taxes, investors can allocate more capital toward acquiring higher-value properties, potentially leading to increased long-term wealth accumulation.
Portfolio Diversification
The exchange provides an opportunity to diversify an investment portfolio by allowing the taxpayer to exchange one type of property for another. This flexibility enables investors to adapt their holdings to changes in market conditions or investment strategies.
Estate Planning
In certain situations, a 1031 exchange can be used as part of an estate planning strategy to facilitate the transfer of real estate investments to heirs while deferring capital gains taxes.