IRC 1031

Section 1031 of the Internal Revenue Code applies specifically to the exchange of "property held for productive use in a trade or business or for investment" (according to the language of the code). It applies to commercial real estate but not to one's personal home. It also does not apply to certain kinds of investment property such as stocks, bonds, and so forth.

IRC 1031 mandates the use of a Qualified Intermediary to essentially hold the funds involved in the exchange. In the most common type of IRC 1031 exchange, one property (such as an apartment building) is sold, and the Qualified Intermediary holds the funds. The seller then searches for replacement business or investment property (such as TIC property) which must be identified within 45 days from the date of sale of the original property.

The replacement property is then purchased (using all the funds held by the Qualified Intermediary) within 180 days from the date of the original sale. This is called a delayed exchange. If 1031 rules are followed, the IRS will not recognize a gain on the sale of the original property, thus allowing the investor to defer capital gains taxes.

Mr. Tim Marshall founded TM 1031 Exchange primarily to help investors with one key aspect of 1031 exchanges--the search for replacement property. As the investor has only 45 days to identify replacement property, it is important that he or she have access to a pool of suitable investment real estate. TM 1031 Exchange provides just such a nationwide pool through its independent National Referral Network. For more information on TM 1031 Exchange or replacement properties, please call 1-877-4TM-1031 or send an email here info@tm1031exchange.com.