What is a 1031 Exchange?

For investors, a 1031 Exchange may provide an effective tax strategy for tax deferral as part of succession and estate planning. Internal Revenue Code Section 1031 provides that “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment”.

DEFER CAPITAL GAINS

Section 1031 of the Internal Revenue Code provides an effective strategy for deferring the capital gains tax that may arise from the sale of your business/investment property. By exchanging the property for like-kind real estate, property owners may defer their tax and use all of the sale proceeds for the purchase of replacement property. Like-kind real estate includes business/ investment property, but excludes any personal use property.

DID YOU KNOW…

A 1031 Exchange may afford you the opportunity to defer capital gains tax and build wealth.

EXAMPLES OF LIKE-KIND PROPERTIES

  • Office Buildings

  • Retail Centers

  • Warehouses

  • Vacant Land

  • Duplexes and Triplexes

  • Single-Family Rentals

  • Apartment Buildings

  • Condominiums

  • Industrial Property

  • Rental Resort Property

  • Hotels and Motels

  • Mineral Rights

  • Water Rights

  • Air Rights

  • Development Rights

  • Easements

  • Tenancy-In-Common (TIC) Interests

  • Delaware Statutory Trust (DST) Interests

  • Leasehold Interests
    (30 Years Remaining or Less)

  • New York Cooperatives

Potential Benefits

MADISON’S 1031 PROGRAMS (DST) OFFER MANY POTENTIAL BENEFITS, INCLUDING:

  • Targeted attractive current distribution rates

  • Passive ownership

  • Efficient and timely tax reportings

  • Professional asset management services

  • Comprehensive investor communication and reporting

  • Potential tax deferral

  • Long-term appreciation potential