A Tax-Deferred Exchange or "1031 Exchange" is one of the most powerful Tax Deferral Strategies remaining available for Taxpayers. Section 1031 of the Internal Revenue Service Code is the basis for tax-deferred exchanges. Taxpayers should never have to pay income taxes on the saleof real property if they intend to reinvest the proceeds in similar or like kind property. Professionals involved with advising or counseling Real Estate Investors need to know about Tax-Deferred Exchanges,including Realtors, accountants, financial planners and tax advisors. The Advantage of a 1031 Exchange is the ability of a Taxpayer to sell income,investment or business property and replace it with like-kind Replacement Property without having to pay federal or state income taxes on the transaction. A sale of property and subsequent purchase of a Replacement Property doesn't work; there must be an Exchange. The tax basis of the Replacement Property is essentially the purchase price of the Replacement Property minus the gain which was deferred on the sale of the Relinquished Property as a result of the exchange. The Replacement Property thus includes a deferred gain that will be taxed in the future, only if the taxpayer "cashes out" of his investment. Of course there are certain rules that must be followed with a 1031 Exchange, yet this can be a an extremely powerful resource for the Investor. Please ask about this process so we may assist and connect you with the right professional for you. Get started today.