With the increased interest in single family homes as investments, more and more professionals are finding themselves involved in Section 1031 transactions. Section 1031 of the Internal Revenue Code provides a tax-deferral mechanism that allows investors to accumulate wealth from certain types of real property exchanges. By precisely following the Section 1031 rules, a taxpayer can dispose of an appreciated asset without owing immediate capital gains tax. Under Section 1031 rules, the investor can roll the entire proceeds-including the gain-into like-kind real property. This course provides an explanation of who, what, where, when, and how such a tax-deferred exchange is accomplished.

• Define basic tax concepts such as like-kind property, basis, capital gain, realized gain, recognized gain, and boot
• Explain the benefits of a tax-deferral under Section 1031
• Demonstrate an understanding of the terminology in Section 1031 such as exchanger, original (relinquished) property, replacement property, and qualified intermediary
• Give examples of the types of property eligible for 1031 exchanges
• Summarize the strict IRS timing deadlines

Tax Year: 2022-2023

Basic federal tax concepts and rules related to capital gains and losses, realized versus recognized gain, basis, and boot.