Section 1031 Tax Free Transactions
Taxpayers who own investment real estate for several years may have a large capital gain which will result in federal and state capital gains tax when sold. This gain, and the resulting tax, would be larger where the tax basis of the property is reduced due to prior depreciation deductions. If you own real estate which you would like to sell, you may be hesitant due to the large federal and state capital gain tax which would result. Section 1031 of the Internal Revenue Code allows you to sell your real estate and avoid the payment of capital gains tax by reinvesting the proceeds in real estate within certain time limits. The capital gain tax is delayed until you decide to liquidate your new real estate investment without reinvesting in real estate within the section 1031 rules. It is possible to completely avoid capital gain tax through Section 1031 if you hold real estate until your death and receive a stepped up basis upon your death. Attorney Rubino can represent you in the sale of your investment real estate and ensure that you comply with Section 1031 in order to delay or avoid the capital gain tax.
Contact tax attorney James Rubino online or call 203-327-4212.