The 1031 Exchange can be a powerful wealth-building strategy for commercial real estate investors.

The large tax burden that often accompanies the sale of an investment property can be a troubling issue for many individuals. Section 1031 of the Internal Revenue Code offers a viable solution. Section 1031 Exchanges allow you to sell one investment property, buy another like-kind replacement property, and defer capital gains tax that would ordinarily arise.

Completing a 1031 Exchange may give investors increased purchasing power. Instead of paying a significant portion of the sales proceeds to taxes, all their equity is available for purchasing more real estate. This offers a tremendous advantage and illustrates the power of owning real estate held for investment. It can be a very important asset in a diversified investment portfolio.

A common type of 1031 Exchange is often referred to as a three-way delayed exchange.

Step 1:
Investor (Exchanger) sells existing property

Step 2:
Investor’s proceeds go directly to qualified intermediary to be held for investor

Step 3:
Investor finds new property to purchase

Step 4:
Intermediary sends investor’s funds to seller to purchase new (replacement) property for investor











	While a 1031 Exchange offers a unique opportunity to reinvest gain and receive tax deferral and growth potential, it is not a simple transaction and is not for everyone. When evaluating whether a 1031 Exchange is right for you, you should consult your tax professional regarding the specifics of your situation.

For more information, please call 303.798.5407 or toll-free 866.442.5381

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