This was a contract clause someone puts on there contract note before settlement.
*Seller agrees to participate in a S1031 exchange with the buyer at no cost or obligation to the seller.
Is this American??
P.S. Sorry for all the questions but as a newbie the only way I find to learn is by asking heaps of them!
This is something particular to the US only.
A 1031 Exchange is where the seller agrees roll the Capital Gains from a sold property directly into a new investment property of greater value.
This defers having to pay tax on the Gain, means that the invester has greater leverage & can watch investments compound very rapidly.
This is just one advantage of US tax laws that we don’t have in Aust.
mixrex [
]Hi,
Yes, Mixrex is correct.
The following text is taken from:
http://www.section1031.com“Section 1031 is a provision of the Federal Income Tax Code that allows companies and individuals to exchange property of a like-kind without payment of the capital gains taxes due. The provision has been in the law since March, 1921, and is well settled. Most* U.S. states follow Section 1031 with respect to their own capital gains taxes, however, even the few that do not allow resident taxpayers to exchange for property out of state will allow them to do so in-state.”
This seems to be a good site for more information on the topic.
Cheers,
Steve McKnight
–holidaying in Mackay–**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
]
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