Community Bank’s Aubrey Walden, Senior Vice President, International and Treasury Banking Manager, provides need-to-know details on the 1031 Exchange.
Q. How does a 1031 Exchange benefit someone?
When selling an investment property to reinvest in another property, a 1031 Exchange might offer an alternative to paying capital gain taxes. Section 1031 of the Internal Revenue Code allows property investors to sell a property, purchase another “like-kind” property, and defer capital gain taxes.
The capital gain taxes pursuant to the sale of the surrendered property are deferred until the new replacement property sale has closed.
Q. Who can help with the 1031 Exchange?
A tax-deferred exchange involves an independent party known as a “qualified intermediary” to escrow funds after the sale of relinquished property, prior to the purchase of a replacement property. Community Bank is available to assist investors with identifying a “qualified intermediary” to hold the proceeds and offer advice while explaining the process.
Want help identifying a qualified intermediary? Or have questions? Email us at email@example.com or call 1.800.788.9999