Country Village Rentals and Real Estate Weblog

What is a 1031 Exchange?

A 1031 Exchange is a transaction in which a taxpayer is allowed to sell one property to buy another without recognizing, but instead deferring taxable income on the sale.  This can be done through a simultaneous or delayed 1031 Exchange.  The transaction is aptly named after the federal tax law allowing it, Section 1031 of the Internal Revenue Code.  It is the best strategy for the deferral of capital gains and depreciation recapture tax that would ordinarily arise from the sale of highly appreciated real estate.

A successful exchange results in the taxpayer being able to utilize 100% of the proceeds from the sale of property to purchase a new property, thereby deferring capital gains and recapture tax on the relinquished property.

Real estate owners may accomplish several objectives by using a 1031 Exchange, including greater leverage, diversification by asset class and geographic location, improved cash flow, and/or property consolidation.

How does a 1031 Exchange work? (more…)

The road that winds around St. Barthélemy offers some of the most spectacular vistas in the Caribbean as it curves up and down steep hills, snakes along windswept beaches and crosses coconut groves and salt marshes.

Waterlilly House, which overlooks the Bay of St Jean in St. Barts, is one of the luxury houses offered for sale as part of the island’s Eden Rock Residence Club. (more…)