1031 Tax Deferred Exchange

Tax deferred 1031 exchanges have become a very popular way to defer the tax on the gain
of the sale of real estate. Provided all tax laws are complied with, American Title Agency can
act as the intermediary until such time as the replacement property can be purchased. During
the interim period, we will hold the proceeds of sale in a secure escrow account, and deliver
the proceeds via check or wire to complete the purchase of the replacement property.

What Is a 1031 exchange
Internal Revenue Code Section 1031 provides that no gain or loss will be recognized on the exchange of any type of business use or investment property for any other business use or investment property. 1031 Exchanges are not really exchanges in the context of two-party barter. Instead, they are typical sales and purchases that involve the same exact ingredients as any other sale or purchase, without the capital gains. The only real difference is the investor is increasing his selling and buying power by electing to avoid the drain of taxes under Section
1031 regulations. No other aspects of the transaction are affected.

Who Should Consider a 1031 Exchange?
Anyone who is thinking about selling a business use or investment property should consider affecting a 1031 Exchange. An Exchange offers the astute investor an opportunity to reinvest
the federal capital gains that would normally be handed over to the IRS and put that money
to work for himself. You work too hard to simply pay the tax without carefully considering this reinvestment option. Essentially, 1031 Exchanges should be thought of as an interest free loan from the IRS; one in which the principal may be increased through subsequent exchanges and may never require repayment, if you plan properly.

Lender Services
Our legal and closing departments will provide support in any way necessary to lenders
in NY & NJ.