1031 Exchanges

The 1031 Exchange is perhaps the most powerful tax deferral strategy available to
Taxpayers. The concept of the exchange is quite simple; the Internal Revenue Code
provides that an investor may exchange “Like-Kind Property” without a tax
consequence. While the concept is simple, the details are daunting and the success
of the transaction is based upon creating a plan and the appropriate execution of
the plan with your Real Estate Professional.

Why consider an exchange? As an investor you have the ability to buy and sell
Like-Kind property without paying federal income taxes, thus allowing you to retain
your pretax wealth to continue compounding returns.

There are several types of exchanges:

     Delayed Exchange – This is a transaction whereby you sell one property before
     a replacement property is acquired.

     Reverse Exchange – A reverse exchange occurs when you acquire a replacement
     property prior to selling the property you owned.

     Simultaneous Exchange – A simultaneous exchange occurs when you dispose
     of your existing property and acquire a replacement property at the exact
     same time.

     Improved Exchange – An improved exchange occurs when the owner uses
     exchange proceeds to develop or improve a replacement property.

     Personal Property Exchange – Investors can also exchange certain types of
     personal property and business equipment such as aircraft, automobiles,
     tax is among the 13 asset classes provided by the IRC.

Because of the complexities, it is recommended that in addition to your Real Estate
Professional you consult with your Accountant and Attorney through the various
stages of the transaction.