What You Need to Know About 1031 Tax Exchange in Davenport IA

There are many tax laws, rules, and regulations that most people never even hear of or know about, and in the business world there are even more. One that can save people money in tax breaks yet is seldom used is the 1031 tax exchange in Davenport, IA. This special, situational exemption can help sellers of property avoid taxes on any profits they make from the sale of that property. Here are the requirements that are in place for this tax break:

What it Takes to Qualify for the 1031 Tax Exchange

In order to be deemed legally eligible for this tax deferring exchange, there are a number of conditions and requirements that have to be met at the time of the sale of the property:

In most cases, this exemption is used in regards to the sale of real estate, and in most cases some sort of a tenancy in common will help the sale to qualify for the exemption.
Both Properties involved in the buying and selling of the property must be used for commercial or investment purpose – not rental or primary occupancy real estate.
In some special situations, general occupancy real estate properties can qualify. Examples of these are vacations homes, condos, and some rental properties.
The new property being invested into must be deemed of “like-kind” to the one that is being sold. Commercial properties cannot be exchanged for general residency properties.
If the exchange will not occur at the same time as the transfer of the title from seller to buyer, then a limited timeframe will be outlined for the final exchange to take place by.
Working with a skilled and experienced tax expert who has real-world experience with 1031 tax exchanges in Davenport, IA, is the best way to ensure all legal requirements are met.