Real Estate, Real Estate Investing

What You Need to Know About Internal Revenue Code 1031

The Internal Revenue Code 1031 is the best way for those invested in real estate to be able to not only sell their home but get out of the real estate business all together. There are those that have the false assumption that the Internal Revenue Code 1031 is just for those that are millionaires in the real estate investment business. However, they are wrong.

The reason the Internal Revenue Code 1031 is so popular is because it encompasses any type of property that is used for investment or business purposes, whether it be large of small. For example, strip malls, undeveloped land and or hotel property is all eligible under the Internal Revenue Code 1031.


One of the biggest benefits that the Internal Revenue Code 1031 provides investors is financial stability. If an investor has an investment that is not profitable they can use the Internal Revenue Code 1031 to redirect their money without incurring any capital gains taxes. Since the purpose of the investor is to make money, the Internal Revenue Code 1031 is something that all investors should use to their advantage.


It use to be that when investors wanted to use the Internal Revenue Code 1031 that they would have to settle for a property that was similar to the one that they tried to get rid of. However, after new laws were passed regarding the code, it became possible for investors to find an array of other possibilities that could be more financially sound.


When investors become unhappy with their investment, many times it can be a headache and an overall stressful situation. However, Internal Revenue Code 1031 is able to make this situations disappear. Once investors get to this point, the tenant in common exchange of the code 1031 allows for these investors to hand over the investment to a team of experts that are prepared and know how to manage the situation much better. By doing so, the investors are still able to keep the income that is generated from the property however they avoid the feeling of despair that occurs from the stress of the property. The Internal Revenue Code 1031 is literally the best option for those investors that still want to keep the property but not have to have hands on dealings with the property. What is more is that code 1031 allows for the property to be transferred to the investors’ permanent residence which avoid the expense capital gains taxes.




Peter L. Mosca, “The 1031 Exchange in Today’s Market” Realty Times


Todd R. Pajonas, “A Primer on 1031 Exchanges”