Pennsylvania 1031 Exchange Explained

Pennsylvania 1031 Exchange Explained

A tax-deferred exchange is a method by which a pennsylvania real estate investor trades one or more relinquished pennsylvania rental real estate for one or more replacement pennsylvania rental real estate of like-kind, while deferring the payment of federal income taxes and some state taxes on the transaction. In turn, internal revenue code provides that no gain or loss shall be recognized on the exchange of pennsylvania rental real estate held for productive use in a trade or business. Pennsylvania 1031 Exchanges are useful in a wide variety of circumstances. They provide excellent opportunities for resourceful pennsylvania real estate investors to create transactions which would not be possible through a sale/purchase format. The overriding advantage of exchanging lies in the ability to move equity from pennsylvania rental real estate to pennsylvania rental real estate without having to pay the capital gains taxes. exchangers can create an entire investment program using the wide variety of benefits available, and a pennsylvania real estate investor can move successively from one pennsylvania 1031 exchange to another any number of times.