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What Is 1031? also referred to as a 1031 Exchange or Like-Kind Exchange, and falls under Section 1031 of the Internal Revenue Code. This tax section deals with property value in sale of business or trades and other like sales. Contact us to get your property exchange prepared & filed by a qualified Treasury Regulations professional. Need Help with 1031 issues ? Then contact us now >
 
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§ 1031. Exchange of property held for productive use or investment...Read more law >

Related Hot Topics

    • Qualified Intermediaries
    • Indirect Costs
    • Business Property
    • Like-Kind Property
    • Land Exchange


    Different combinations are possible when doing a 1031 exchange.

    Improved property can be replaced with unimproved property, and vice versa.

FAQs Questions about 1031 Exchange


Question: Can transfers of real estate between a business entity and its owner be considered a gift?

Answer:

No. Such transfers are not gifts because the owner receives consideration in exchange. The consideration comes either in the form of additional shares (or other indications of ownership interests) in the business entity and the business will have additional assets as a result of the transfer, or in the form of the enhanced value of the owner’s shares (or other ownership interests) as a result of the transfer. Any transfer of real estate between a business and it’s owners is taxable based on the fair market value of the assets transferred.




Question: Can transfers of real estate between a business entity and its owner be considered a gift?

Answer:
No. Such transfers are not gifts because the owner receives consideration in exchange. The consideration comes either in the form of additional shares (or other indications of ownership interests) in the business entity and the business will have additional assets as a result of the transfer, or in the form of the enhanced value of the owner’s shares (or other ownership interests) as a result of the transfer. Any transfer of real estate between a business and it’s owners is taxable based on the fair market value of the assets transferred.




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Did You Know ?
Different combinations are possible when doing a 1031 exchange.

Improved property can be replaced with unimproved property, and vice versa.

Need to get more information about Treasury Regulations & 1031 issues? Then click here to contact us.