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1031 “Like-Kind” Exchanges

Section 1031 of the Internal Revenue Code affords real property owners the ability to defer taxes that would otherwise arise on the sale of their property by reinvesting the proceeds from sale of their property in either another property or a fractional interest in real property through a tenant-in-common structure. The benefit of such tax deferment is that it gives the investor the ability to reinvest their entire pre-tax gain on the original sale into another income producing asset, thereby realizing a return on a larger investment than would otherwise be possible.

In order for an exchange to qualify for 1031 tax deferred treatment, the entire transaction must be completed in accordance with detailed rules and regulations as outlined in the Internal Revenue Code. For example, an investor must not take possession of the proceeds from the sale of the “relinquished property”, but must arrange for those proceeds to be received and held by a Qualified Intermediary. An exchange investor must identify, in writing, “replacement properties” within 45 days from the sale of the relinquished property, and generally must close on the purchase of the replacement property within 180 days of the original sale.

Fleisher Smyth Brokaw has more than 15 years of experience arranging 1031 transfers for our investors. We are adept at ensuring that transfers are done in accordance with the IRS Code and we are well positioned to offer our investors opportunities to transfer into larger, higher-quality assets through tenant-in-common structures. For more information about 1031 exchange opportunities contact Michelle Brokaw at (720) 904-1182 or by email at michelle.brokaw@fsbrei.com

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