|
1031
Real Estate Trading Sees Explosive Growth
The
use of barter—non-cash trading—goes far beyond the commercial
barter industry. Another example of the enormous numbers through the
use of barter in one such sector is the phenomenal expansion of real
estate exchanges. According to a Deloitte study the use of tax-deferred
1031 transactions in 2003 totaled $210 billion, more than double the
$86 billion in 2001.
A “1031
exchange” comes about when a taxpayer takes the following actions:
Within 45 days of selling a property he/she must identify the new one
they intend to buy. Then within 180 days of sale they must close on
the new asset.
In
the meantime a middleman holds the cash. The tax break isn’t available
for a person’s residence or a second, country home. But it does
cover the sale of a house an owner rents out, commercial real estate,
business jets, factories and more.
|
