How to defer taxable gain

If you are wanting to defer your taxable gain there are some rules that you will have to follow when it comes to Section 1031. These are simple and easy to understand and they must be adhered to in order to have a valid exchange.

First of all the property that you are acquiring, the replacement property needs to be at least equal to or even greater than the property that you are giving in exchange and the equity that is in the new property must also be at least equal to that in the old property.

The debt on the new property must be equal to or greater than that on the old as well and the entire net proceeds from the sale of the relinquished property must be used in order for you to get the new property.

These are important points that you need to know in order to make sure that you have exchanged your property properly. That is the only way for you to defer your taxable gain.