3 Questions to Ask About the 1031 Exchange

In the real estate sector, the famous 1031 exchange plan is used by a lot of individuals to qualify for tax-deferrals. While this plan does offer such advantages, there are a lot of rules and regulations you need to comply with to be eligible for this plan. Since it is not always possible to know and understand the complex terms on your own, you need to seek the assistance of a professional Utah’s 1031 exchange company and follow the processes you need.

Here are some of the questions you should ask before you gather information about the 1031 exchange plan:

1. What is the 1031 exchange?

To begin with, you need to gather information about what the plan is. Well, the 1031 exchange plan comes from section 1031 of the IRS (Internal Revenue Service) guidelines. In principle, the 1031 exchange plan is about the swapping of like-kind properties. Although the selling and purchasing of properties do incur taxes, if it qualifies for the 1031 exchange, you might have to pay little or no taxes at the time of exchange.

2. Who can opt for the 1031 exchange?

Once you know the basics of the plan, you might want to know who can opt for this plan. Well, almost all individuals can; provided that they fulfill the requirements mandated by the IRS. Some of the individuals who opt for the 1031 exchange plan are property owners, investors, vacation-home owners, and other individuals. You need to get in touch with a popular Utah’s 1031 exchange company to understand the terms and conditions of this exchange plan.


3. Does it have any special provisions?

Finally, you need to know whether the 1031 exchange plan has any special provisions. Well, it sure does. There are special terms for the definition of “like-kind” properties, duration in which you need to complete the sale, and other terms. You need to have information about all these aspects before you make an informed decision. Also, if you plan to opt for a 1031 exchange plan for a vacation home, you need to check the upgrades in the plan before proceeding further.

If you wish to know more about the plan, you should get in touch with Utah’s 1031 exchange company and complete the exchange.

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