Category: 1031 Exchange General

Starting and growing a small business is no easy task. There are many challenges and obstacles to overcome, and it can create more financial hardships than it makes good fortunes. But when a small business grows and flourishes, 1031 exchanges provide support to small business owners needing a larger workspace, to relocate to a more prominent area for their business offerings, or an expansion to different properties. So, what’s stopping small business owners from continuing the upward trajectory they have invested in?
One reason could be taxable gains. Taxable gains are profits from the sale of any asset and subject to taxation. So, suppose a small business owner of a salon, restaurant, or bakery wants to sell their current property and buy a bigger one. In that case, they might hesitate to do so because if they receive the money from the sale of the old property, the IRS views that as receiving the sale’s profit and will tax that money. The sale will still be taxed even if the money from the sale all went towards a new property, your business, and you received no monetary gain.
How Do 1031 Exchanges Support Small Businesses?
Section 1031 of the Internal Revenue Code is a beneficial strategy allowing the owner to defer their gain by structuring the property sale and purchase as an exchange. By deferring taxes owed to the government, more cash is available to buy new property. The intended purpose of a 1031 exchange real estate investors choose more and more to invest in social impact projects benefiting neighborhoods and communities. With access to more capital, they also improve properties to make them more energy-efficient, helping the environment. Growth leads to the creation of more jobs and opportunities.
Navigating the business world and trying to grow a company or a brand is a part of being a business owner. What doesn’t have to be, is struggling to invest in your future.
1031 Exchange Advantages
There are many benefits to leveraging 1031 exchange; however, some costs and considerations are present that taxpayers should consider when contemplating whether or not to execute an exchange. Taxpayers should always consult with their independent tax and legal professionals when contemplating whether or not to execute a

Starting and growing a small business is no easy task. There are many challenges and obstacles to overcome, and it can create more financial hardships than it makes good fortunes. But when a small business grows and flourishes, 1031 exchanges provide support to small business owners needing a larger workspace, to relocate to a more prominent area for their business offerings, or an expansion to different properties. So, what’s stopping small business owners from continuing the upward trajectory they have invested in?
One reason could be taxable gains. Taxable gains are profits from the sale of any asset and subject to taxation. So, suppose a small business owner of a salon, restaurant, or bakery wants to sell their current property and buy a bigger one. In that case, they might hesitate to do so because if they receive the money from the sale of the old property, the IRS views that as receiving the sale’s profit and will tax that money. The sale will still be taxed even if the money from the sale all went towards a new property, your business, and you received no monetary gain.
How Do 1031 Exchanges Support Small Businesses?
Section 1031 of the Internal Revenue Code is a beneficial strategy allowing the owner to defer their gain by structuring the property sale and purchase as an exchange. By deferring taxes owed to the government, more cash is available to buy new property. The intended purpose of a 1031 exchange real estate investors choose more and more to invest in social impact projects benefiting neighborhoods and communities. With access to more capital, they also improve properties to make them more energy-efficient, helping the environment. Growth leads to the creation of more jobs and opportunities.
Navigating the business world and trying to grow a company or a brand is a part of being a business owner. What doesn’t have to be, is struggling to invest in your future.
1031 Exchange Advantages
There are many benefits to leveraging 1031 exchange; however, some costs and considerations are present that taxpayers should consider when contemplating whether or not to execute an exchange. Taxpayers should always consult with their independent tax and legal professionals when contemplating whether or not to execute a

Starting and growing a small business is no easy task. There are many challenges and obstacles to overcome, and it can create more financial hardships than it makes good fortunes. But when a small business grows and flourishes, 1031 exchanges provide support to small business owners needing a larger workspace, to relocate to a more prominent area for their business offerings, or an expansion to different properties. So, what’s stopping small business owners from continuing the upward trajectory they have invested in?
One reason could be taxable gains. Taxable gains are profits from the sale of any asset and subject to taxation. So, suppose a small business owner of a salon, restaurant, or bakery wants to sell their current property and buy a bigger one. In that case, they might hesitate to do so because if they receive the money from the sale of the old property, the IRS views that as receiving the sale’s profit and will tax that money. The sale will still be taxed even if the money from the sale all went towards a new property, your business, and you received no monetary gain.
How Do 1031 Exchanges Support Small Businesses?
Section 1031 of the Internal Revenue Code is a beneficial strategy allowing the owner to defer their gain by structuring the property sale and purchase as an exchange. By deferring taxes owed to the government, more cash is available to buy new property. The intended purpose of a 1031 exchange real estate investors choose more and more to invest in social impact projects benefiting neighborhoods and communities. With access to more capital, they also improve properties to make them more energy-efficient, helping the environment. Growth leads to the creation of more jobs and opportunities.
Navigating the business world and trying to grow a company or a brand is a part of being a business owner. What doesn’t have to be, is struggling to invest in your future.
1031 Exchange Advantages
There are many benefits to leveraging 1031 exchange; however, some costs and considerations are present that taxpayers should consider when contemplating whether or not to execute an exchange. Taxpayers should always consult with their independent tax and legal professionals when contemplating whether or not to execute a

The country’s hot real estate market is leaving more and more people with significant potential taxable gains if they were to sell. Farmers, business owners, and real estate investors can benefit from the tax-deferred exchanges from section 1031 of the tax code when they make the decision to sell and buy “like-kind” property. Of course, there can be hesitations to sell the property at a significant gain due to the tax implications some believe they will incur. But, when that gain goes towards the continuity of investment, specifically a business investment, section 1031 can defer it.
1031 Exchanges FAQs
In A frequently asked question about 1031, or like-kind exchanges (LKEs), is what does tax-deferred mean? When utilizing a like-kind exchange, you are selling and buying real estate to support your business or investment portfolio. By using the required third-party Qualified Intermediary (QI), the taxpayer will defer the gain on sale and be able to reinvest the proceeds in another property to grow their business or portfolio. The taxes are paid only when the taxpayer receives the gains from the sale of a property. By deferring the taxes owed to the government, more cash is available to reinvest in a new property.
Environmental Benefits of 1031 Exchanges
Everyday more and more investors and companies are leveraging the benefits of the 1031 exchange to go “green” by investing in more energy-efficient buildings and properties that support renewable energy such as solar arrays and wind farms. Beyond the purely environmental benefits, companies and investors realize the added investment value and cost savings of these green investments. This includes lower ongoing energy costs, higher resale values, stable income production, and upfront and ongoing tax incentives.
There are various ways in which investment and environmental benefits can align:

An investor owns a business in Arizona, where they do not have the capital or desire to retrofit the business to be more-energy efficient. and have a significant gain if they sold and then moved to a new location. Using a like-kind exchange, the building owner can exchange their inefficient energy property for a more environmentally friendly building, which allows them to defer taxes on capital gains from their original property. 
An investor cannot find an energy-efficient new building to purchase. Many real estate investors and companies are unaware that they can leverage a 1031 exchange to buy and make substantial improvements to that property over 180 days. In this case, the investor can leverage an improvement exchange to sell their current property and use the proceeds to purchase and then improve the new property to become more energy efficient.
An investor wishes to exchange into or out of a renewable energy source such as a wind farm in Massachusetts. The value of wind farms is primarily a function of the value of the lease, i.e., the rent or royalties, term, and strength of the lessee. Often, the sale prices can be considerable, which may cause a significant tax event to the seller. In many instances, the availability of a 1031 exchange can be the key to enabling a sale to take place by minimizing the tax burden to the seller.

So go ahead – go green and save some green at the same time.

The country’s hot real estate market is leaving more and more people with significant potential taxable gains if they were to sell. Farmers, business owners, and real estate investors can benefit from the tax-deferred exchanges from section 1031 of the tax code when they make the decision to sell and buy “like-kind” property. Of course, there can be hesitations to sell the property at a significant gain due to the tax implications some believe they will incur. But, when that gain goes towards the continuity of investment, specifically a business investment, section 1031 can defer it.
1031 Exchanges FAQs
In A frequently asked question about 1031, or like-kind exchanges (LKEs), is what does tax-deferred mean? When utilizing a like-kind exchange, you are selling and buying real estate to support your business or investment portfolio. By using the required third-party Qualified Intermediary (QI), the taxpayer will defer the gain on sale and be able to reinvest the proceeds in another property to grow their business or portfolio. The taxes are paid only when the taxpayer receives the gains from the sale of a property. By deferring the taxes owed to the government, more cash is available to reinvest in a new property.
Environmental Benefits of 1031 Exchanges
Everyday more and more investors and companies are leveraging the benefits of the 1031 exchange to go “green” by investing in more energy-efficient buildings and properties that support renewable energy such as solar arrays and wind farms. Beyond the purely environmental benefits, companies and investors realize the added investment value and cost savings of these green investments. This includes lower ongoing energy costs, higher resale values, stable income production, and upfront and ongoing tax incentives.
There are various ways in which investment and environmental benefits can align:

An investor owns a business in Arizona, where they do not have the capital or desire to retrofit the business to be more-energy efficient. and have a significant gain if they sold and then moved to a new location. Using a like-kind exchange, the building owner can exchange their inefficient energy property for a more environmentally friendly building, which allows them to defer taxes on capital gains from their original property. 
An investor cannot find an energy-efficient new building to purchase. Many real estate investors and companies are unaware that they can leverage a 1031 exchange to buy and make substantial improvements to that property over 180 days. In this case, the investor can leverage an improvement exchange to sell their current property and use the proceeds to purchase and then improve the new property to become more energy efficient.
An investor wishes to exchange into or out of a renewable energy source such as a wind farm in Massachusetts. The value of wind farms is primarily a function of the value of the lease, i.e., the rent or royalties, term, and strength of the lessee. Often, the sale prices can be considerable, which may cause a significant tax event to the seller. In many instances, the availability of a 1031 exchange can be the key to enabling a sale to take place by minimizing the tax burden to the seller.

So go ahead – go green and save some green at the same time.

The country’s hot real estate market is leaving more and more people with significant potential taxable gains if they were to sell. Farmers, business owners, and real estate investors can benefit from the tax-deferred exchanges from section 1031 of the tax code when they make the decision to sell and buy “like-kind” property. Of course, there can be hesitations to sell the property at a significant gain due to the tax implications some believe they will incur. But, when that gain goes towards the continuity of investment, specifically a business investment, section 1031 can defer it.
1031 Exchanges FAQs
In A frequently asked question about 1031, or like-kind exchanges (LKEs), is what does tax-deferred mean? When utilizing a like-kind exchange, you are selling and buying real estate to support your business or investment portfolio. By using the required third-party Qualified Intermediary (QI), the taxpayer will defer the gain on sale and be able to reinvest the proceeds in another property to grow their business or portfolio. The taxes are paid only when the taxpayer receives the gains from the sale of a property. By deferring the taxes owed to the government, more cash is available to reinvest in a new property.
Environmental Benefits of 1031 Exchanges
Everyday more and more investors and companies are leveraging the benefits of the 1031 exchange to go “green” by investing in more energy-efficient buildings and properties that support renewable energy such as solar arrays and wind farms. Beyond the purely environmental benefits, companies and investors realize the added investment value and cost savings of these green investments. This includes lower ongoing energy costs, higher resale values, stable income production, and upfront and ongoing tax incentives.
There are various ways in which investment and environmental benefits can align:

An investor owns a business in Arizona, where they do not have the capital or desire to retrofit the business to be more-energy efficient. and have a significant gain if they sold and then moved to a new location. Using a like-kind exchange, the building owner can exchange their inefficient energy property for a more environmentally friendly building, which allows them to defer taxes on capital gains from their original property. 
An investor cannot find an energy-efficient new building to purchase. Many real estate investors and companies are unaware that they can leverage a 1031 exchange to buy and make substantial improvements to that property over 180 days. In this case, the investor can leverage an improvement exchange to sell their current property and use the proceeds to purchase and then improve the new property to become more energy efficient.
An investor wishes to exchange into or out of a renewable energy source such as a wind farm in Massachusetts. The value of wind farms is primarily a function of the value of the lease, i.e., the rent or royalties, term, and strength of the lessee. Often, the sale prices can be considerable, which may cause a significant tax event to the seller. In many instances, the availability of a 1031 exchange can be the key to enabling a sale to take place by minimizing the tax burden to the seller.

So go ahead – go green and save some green at the same time.