Section 1031 Of The Internal Revenue Code

Section 1031 a of the internal revenue code 26 u s c.

Section 1031 of the internal revenue code. Section 1031 is a provision of the internal revenue code irc that allows business or investment property owners to defer federal taxes on some exchanges of real estate. 1031 states the recognition rules for realized gains or losses that arise as a result of an exchange of like kind property held for productive use in trade or business or for investment. Section 1031 of the internal revenue code allows an owner of investment property to exchange property and defer paying federal and state capital gain taxes 15 20 applicable state taxes and taxes on gain from depreciation 25 and the obama care tax 3 8 when required if they purchase a like kind property following the rules and regulations of the internal revenue code.

Section 1031 like kind exchanges. Exchange of property held for productive use or investment on westlaw findlaw codes are provided courtesy of thomson reuters westlaw the industry leading online legal research system. It states that none of the realized gain or loss will be recognized at the time of the exchange.

Paragraph 2 d of section 1031 a of the internal revenue code of 1986 as amended by subsection a shall not apply to any exchange of an interest as general partner pursuant to a plan of reorganization of ownership interest under a contract which took effect on march 29 1984 and which was executed on or before march 31 1984 but only if all the exchanges contemplated by the reorganization plan are completed on or before december 31 1984. Section 1031 like kind exchanges have been a component of the internal revenue code almost from its inception. Irc section 1031.

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