1031 exchanges, as set out in the Internal Revenue Code, are a way to reinvest your money when you sell a property, and simultaneously defer the capital gains taxes on the sale of that property. In order to do that, there are some criteria you have to meet. First, you have to reinvest all of your net proceeds into another like-kind property (you can’t pocket any of the money). You also have to abide by the 45 day /180 day timelines, and make sure you have a sufficient debt ratio on the new replacement property.
How Does a Fargo 1031 Exchange Work?
This video explains the basic tenants of a 1031 exchange:
There are many intricacies when it comes to 1031 exchanges. It’s always a good idea to have a 1031 qualified intermediary on your team to prevent any mishaps and make sure your exchange runs smoothly – 877.373.1031.