1031 Exchange

1031 Exchange – What you need to know

1031 Exchange InformationA 1031 exchange allows you to defer the capital gains tax due on the sale of a piece of real property by rolling the gain into any other type of real property. A qualified intermediary must complete the 1031 exchange and there are very specific rules that must be adhered to.

The total capital gains tax calculation as of 2013:

  • Taxation on depreciation recapture at 25%
  • Federal capital gains taxes at 20% (or 15%)
  • 3.8% Medicare surcharge tax on net investment income
  • State tax rate (0% - 13.3%)

Medicare and Federal Capital Gains tax depend on your taxable income