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Real Estate Law – What Is Section 1031 And What Are The Benefits?

  • Section 1031 is an Internal Revenue Code which talks about a tax-deferred exchange.
  • This is an opportunity for sellers of investment properties to defer or delay the payment of capital gains taxes that would normally be assessed to them when you sell investment properties until you acquire and sell that next property.
  • You can keep doing a 1031 exchange for a number of properties that you buy and sell however there are certain tax requirements.
  • Section 1031 is a great way to avoid having to pay capital gains taxes, which can be anywhere from 25-40%, depending upon what your tax bracket is and what state you’re in.

This short informational real estate law video was provided by Arnold Drucker, an experienced Jackson Heights Real Estate Lawyer.