Are 1031 Exchanges an "All or Nothing" Proposition?

One of the nicer features of a #1031 exchange is that it is a flexible tool for exchanging your investment property. While for many investors the goal is total tax-deferral with the transaction, there are times when competing investment goals make that impossible.

The good news is that a 1031 exchange is not an “all or nothing” proposition. You can still complete an exchange, and defer part of the capital gains, even if you reduce your debt, take money out of the transaction or even buy a lesser valued property. The only catch is that you will be liable for the capital gains on the difference. This is known as “boot.”

Still, even a partial tax liability is better than being taxed on the entire transaction.

To find out how we can help you find and close on your next 1031 exchange property or to learn more about the exchange process and our qualified intermediary services, please visit our website.