IRC Section 1031 Tax Defered Real Estate Exchange

I received an email asking if an exchange of vacant land for an improved income producing producing property qualifies for tax defered treatment under Section 1031. Short answer is yes.

Basically, any real estate held for business use or investment may be exchanged for any other real estate held for business use or investment.

Owner Financing

In these difficult times with a lack of financing in the markets, it pays to be up on owner financing. By lowering the equity requirement, a seller can greatly increase the size of the qualifying possible purchasers and put off the capital gains tax on most of the gain.

Also the opportunity may exist to amortize the underlying loan(s) more quickly than the seller financing created thus building equity after the sale of the property.

Glad to field questions on this subject and stimulate input from others as well.