A 1031 exchange is a vehicle under the Internal Revenue Code that allows a seller to use the proceeds from the sale of investment property for the purchase of replacement investment (“like kind”) property.
As long as the rules are strictly adhered to, the procedure allows a seller to defer the payment of capital gains taxes. A seller desiring to do these needs to include specific language in the sale and purchase agreement and we recommend using a “1031 Exchange Facilitator” which is a special type escrow closer.
Attorney at Law
Blado Kiger Bolan, Tacoma, Wash.